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First Credit Union Review

Our review of First Credit Union looks at the pros and cons as well as the current ​Personal Loans, Savings Accounts and Term Deposits, Mortgages Home Loans and Everyday Bank Accounts offered.
Updated 18 July 2024 
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First Credit Union is not a bank, but for the most part offers many banking products. Distinctly New Zealand owned, with eight branches across the Waikato and Bay of Plenty regions, First Credit Union promotes zero-fee loans and interest-earning everyday accounts. Overall, First Credit Union is ideal for consumers looking for a better deal on deposits and loans. And despite only having a handful of branches (see below), all products can be applied and activated online. 

In this guide, we look at the main features and products offered by First Credit Union, including:
Know this first - Fees
  • "First Credit Union does not charge account fees" is a statement that appears throughout marketing materials. While this is true for loans and mortgages, there are card fees.
  • Card fees include a 25 cent fee for using your Eftpos card and a $10 annual fee for a using a Mastercard Debit card. You'll also pay $2 each time you use an ATM.
  • These charges are big business - First Credit Union has consistently charged more than $4 million a year to its members by way of 'ATM/Eftpos Card Recoveries'.

Branches: Hamilton, Te Aroha, Tauranga, Taupo, Whakatane, Kawerau, Ngaruawahia and Rotorua

First Credit Union is not a bank: First Credit Union is owned by the members who bank with them and is not a registered bank, however, it offers almost everything the banks do. First Credit Union is a Non Bank Deposit Taker (NBDT) and as such is registered and supervised by the RBNZ. First Credit Union has a credit rating of ‘BB’ with a stable outlook issued by Fitch Ratings.​

First Credit Union is Our Favourite Credit Union and Personal Lender

We place a lot of weight on fees and fairness, hence our comfort in awarding First Credit Union our Favourite Credit Union and Personal Lender.
We believe First Credit Union is ideal for consumers looking for a better deal on deposits and loans. And despite only having a handful of branches, all products can be applied and activated online.

Best of all, First Credit Union does not charge account fees for loans and mortgages, making it highly beneficial to New Zealanders looking for help to get ahead.

We really like that anyone who takes a personal loan must also contribute at least $5/week to a savings account - this means every borrower finishes their loan with savings.
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Pros and Cons of First Credit Union

Pros:
  1. No early repayment fees for any loan - giving borrowers the option to save interest costs by speeding up their repayments.
  2. No loan application or issue fees - many lenders charge these; First Credit Union does not.
  3. "Proudly owned by the people who bank here" makes First Credit Union very different from a bank. All the profits are re-invested and help keep the services affordable. Unlike most New Zealand banks, it doesn't pay fat dividends to shareholders. 
  4. Personal loans require borrowers to have a savings account with a minimum $5/week deposit. This means every borrower finishes their loan with savings.
  5. Leading interest rates for term deposits, and a range of savings options for specific purposes - Christmas and travel being examples.

Cons:
  1. The reviews of the Android and Apple app are not positive. However, in our discussions with First Credit Union, they advised that Mobile App reviews all pertain to an older version, and that they upgraded their apps to fix the issues raised.
  2. Everyday accounts, which is First Credit Union's bank account offering, have annual and per-transaction debit card fees, as well as ATM withdrawal charges. We discussed these with First Credit Union, who stated that the fees charged are simply a cost of service that they pass on to our members, and the fees charged just cover the direct costs incurred to provide the debit card product to members. In summary, we don't believe First Credit Union makes a profit from the fees charged. 

First Credit Union Products Review

In this section, we look at the four main products offered by First Credit Union - ​Personal Loans, Savings Accounts and Term Deposits, Mortgages and Home Loans and Everyday Bank Accounts.
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Personal Loans

First Credit Union offer personal loans that offer a number of benefits, with affordability and flexibility being major features. The personal loans offered also cover debt consolidation loans and car loans. ​If you are a New Zealand citizen and over 18 years old, you can apply to borrow any amount over $500 for a maximum of five years.

Know this: If you get a personal loan with First Credit Union, you will need to open a 'Loan Provider Account'. This means:
  1. You'll need to save a minimum of $5 per week in the account, and the funds are frozen until your loan is paid off in full. Currently, the interest rate is 1.25% p.a. 
  2. The benefit of this is that as you pay off your debt you also build up savings.
  3. As an example, if you took a loan for two years and made the minimum deposit of $5/week, you'd have a $500+ nest egg at the end. If you paid in $10/week and had a loan for five years, you'd come out with $2,600+ in savings.

What we like

  • Affordable interest rates, which float between 10.95% p.a. to a maximum of 18.00% p.a. What you'll pay (and how much you can borrow) will be determined by First Credit Union when they assess your credit history, personal circumstances and the amount you wish to borrow.
  • No application fees - many lenders charge $250, $300 or even more if you take out a personal loan - First Credit Union has no such fees.
  • No early repayments fees - you can repay your balance and not be charged a fee.
  • Flexibility - borrowers can apply to top up or extend their loans free of charge.
  • You can apply for pre-approval for car loans so you know how much you can afford. Our buying a used car guide has more details on how to make your money go further. 
  • ​Loan Provider Account - we like the requirement that helps you come out of debt with savings.
  • Secured loans only - First Credit Union only offers secured loans, which we see as positive given the incentive to keep up repayments and (usually) lock in a relatively lower interest rate.

What we don't like

  • Very little. First Credit Union offers transparent personal loans that are competitive not only with the interest rate but also the absence of fees and penalties.
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Savings Accounts and Term Deposits

First Credit Union offers a range of specialist savings accounts and a range of term deposit rates (click here for the latest interest rates with a $500 minimum deposit).

Current savings accounts on offer include:
  1. Online Savings Account - offers a leading interest rate of 0.75% p.a.
  2. Christmas Club Account - offers an interest rate of 0.75% p.a with money locked up until November
  3. Money Maker Account - offers an interest rate of 0.25% p.a to 0.75% p.a depending on your balance 
  4. Special Purpose Account - offers an interest rate of 0.05% p.a and is designed for short-term saving
  5. Travel Account - offers an interest rate of 0.75% p.a to help you save for a holiday

What we like

  • The range of helpful savings products, from 'travel', 'Christmas' etc which make saving goals purposeful and empowering.
  • ​No direct debits can be set up to be set up from a savings account, protecting your savings from being spent.

What we don't like

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Mortgages and Home Loans

First Credit Union offers mortgages, and there's a lot to like as we detail below.

What we like

  • Market competitive interest rates (one and two-year terms, as well as floating) 
  • Mortgages for those without a 20% deposit
  • Flexible repayment terms - no penalties if you want to overpay on your mortgage.
  • Free pre-approvals (which lets you house hunt knowing how much you can spend).
  • No application fees on home loans

What we don't like

  • Very little. While home loan interest rates offered by the banks may be slightly lower, First Credit Union prides itself on helping those without a full 20% deposit and/or those wanting to make overpayments without penalties.
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Everyday Accounts

First Credit Union offers a zero monthly-fee 'Everyday Account', which will appeal to anyone who uses branch services more than their card. All deposits (direct credit, automatic payment, cash or cheque) and cash withdrawals (at the counter) are free. There are fees for transactions, outlined below.

For younger people, First Credit Union offers a number of specialist accounts (Jimmy Jumper, Youth and Teen), all paying 0.75% p.a on balances.

What we like

  • No monthly account fees, and it's free to make transactions in a branch.
  • First Credit Union pays interest on savings, well above most big banks' everyday account offerings. 
  • There’s no minimum deposit needed to open an account, and no monthly service fees.
  • The account has an optional Mastercard debit card (which does incur fees).
  • 24/7 access via Internet and Mobile Banking.
  • The option to add two additional transaction accounts, which are also free:
  1. The Bill Pay Account, which is designed to keep your bill payments separate from your savings and everyday spending. 
  2. The Expense Account, designed to help you budget by keeping money separate from your everyday money for expenses. The account pays standard interest and offers free direct debits and credits. To help you save and not spend, you can't add an Eftpos card with this account.
  • There is an overdraft facility available, subject to application and approval.

What we don't

  • The card fees, specifically the 25 cent fee for using your Eftpos card, $2 ATM fee, $10 annual fee for a using a Mastercard Debit card, and above-average international charges. 
  • Want to see alternative bank accounts that waive transaction fees? See our Best Bank Accounts guide.
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Credit Union experience

At First Credit Union, you’ll have fewer branches to visit compared to big banks. What you’ll have access to market-leading deposit rates and fee-free loans and mortgages with competitive interest rates. 

The bank’s website is well regarded for online banking, although the apps are less proven. First Credit Union has a disproportionate number of negative reviews for its mobile app experience. Out of five stars, the app has received an average of 3.7 stars according to Android users and 2.8 stars on the App store.
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About First Credit Union

First Credit Union is celebrating 65 years of serving members in 2020 and was the first New Zealand Credit Union to be affiliated to the worldwide movement. First Credit Union still operates with the founding principle of ‘people helping people’.

Today, the credit union offers New Zealanders a range of products, including personal loans, mortgages, everyday accounts and term deposits. First Credit Union has its headquarters in Hamilton and helps close to 60,000 members achieve their goals within their means.

First Credit Union operates with the belief that "members come first - not profits and overseas shareholders". For this reason, it offers fee-free loans, flexible over-payment terms and competitive interest rates on savings products.

Do you think First Credit Union is right for you?

Want to know more or sign up for an account or a loan? Visit your nearest branch or call First Credit Union.
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Insurance
First Credit Union also offers a number of insurance products. We have not reviewed these in any detail. We do suggest getting a quote using our comparison guides below and comparing it to any quote from First Credit Union.

First Credit Union is Our Favourite Credit Union and Personal Lender

We place a lot of weight on fees and fairness, hence our comfort in awarding First Credit Union our Favourite Credit Union and Personal Lender.
We believe First Credit Union is ideal for consumers looking for a better deal on deposits and loans. And despite only having a handful of branches, all products can be applied and activated online.

Best of all, First Credit Union does not charge account fees for loans and mortgages, making it highly beneficial to New Zealanders looking for help to get ahead.

We really like that anyone who takes a personal loan must also contribute at least $5/week to a savings account - this means every borrower finishes their loan with savings.