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MSE News: UK-wide credit union launches with table-topping savings rates

Former_MSE_Helen
Former_MSE_Helen Posts: 2,382 Forumite
in Savings & investments
"A new credit union, My Community Bank, has launched today offering table topping savings rates..."
Read the full story:

UK-wide credit union launches with table-topping savings rates

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Comments

  • eco_farmer
    eco_farmer Posts: 117 Forumite
    Part of the Furniture 100 Posts Debt-free and Proud!
    why does it have to charge 26.8%? yes that's lower than the payday loan companies and yes the charges are less but it is still way higher than the savings rates and in theory the costs of a credit union are very small so why charge so much?

    eco
    debt free 1st October 2016
  • Masomnia
    Masomnia Posts: 19,506 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    eco_farmer wrote: »
    why does it have to charge 26.8%? yes that's lower than the payday loan companies and yes the charges are less but it is still way higher than the savings rates and in theory the costs of a credit union are very small so why charge so much?

    eco

    Cover the costs of bad debt.
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • KTF
    KTF Posts: 4,855 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    "2.15% is streets ahead of 1.91%." If 0.24% 'streets ahead' then I cant wait to see what hyperbole is applied to the next account that comes along and beats that.

    My money is staying in my Santander 123 account.
  • innovate
    innovate Posts: 16,217 Forumite
    10,000 Posts Combo Breaker
    edited 25 November 2013 at 8:16PM
    Anyone got a link to the website of my community bank please?

    EDIT: http://www.mycommunitybank.co.uk/savings/

    But nothing worthwhile to see there.

    1% AER for a 1 year fixed term account when you can get 3, 4 and 5% instant access. And even 1.6% in a traditional savings account. They must be having a laugh, but they obviously managed to excite a few journalists, going by the press coverage. More "ethical" woffle, it seems.
  • KTF
    KTF Posts: 4,855 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    innovate wrote: »
    Anyone got a link to the website of my community bank please?
    Here: http://www.mycommunitybank.co.uk/
  • SnowMan
    SnowMan Posts: 3,844 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 25 November 2013 at 8:19PM
    Link to the My Community Bank website is

    http://www.mycommunitybank.co.uk/

    I'm not sure about the concept of them operating outside of their geographical area of Brent as it slightly undermines the concept of local community based credit unions.

    That said given they are able to offer rates that beat other savings institutions at the moment then they will attract in savers who might not otherwise have considered saving with a credit union.

    Edit: beaten to it with the link
    I came, I saw, I melted
  • Masomnia
    Masomnia Posts: 19,506 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    So if it's a credit union does that mean these rates represent a 'share of the profits' rather than interest?
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • SnowMan
    SnowMan Posts: 3,844 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 25 November 2013 at 8:28PM
    Masomnia wrote: »
    So if it's a credit union does that mean these rates represent a 'share of the profits' rather than interest?

    The credit union legislation changed fairly recently to allow credit unions to offer accounts at a set rate rather than as a share of profits etc (subject to increased capital requirements where they were doing that).

    So if you go for the 2.75% 3 year account you get 2.75%, no more no less, and you have the FSCS to protect you subject to normal limits (85k) if anything goes wrong.

    Credit unions are effectively co-operatives so profits are ploughed back into the credit union.
    I came, I saw, I melted
  • innovate
    innovate Posts: 16,217 Forumite
    10,000 Posts Combo Breaker
    SnowMan wrote: »
    That said given they are able to offer rates that beat other savings institutions at the moment then they will attract in savers who might not otherwise have considered saving with a credit union.
    But they don't. They don't even come close.
  • SnowMan
    SnowMan Posts: 3,844 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    innovate wrote: »
    But they don't. They don't even come close.

    The 3 year fixed rate account is 2.75% pa. That's pretty well at or close to the best rate available.
    I came, I saw, I melted
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