credit unions

south28

My area has just opened up a credit union and I was thinking of starting a small scheme with them , for Rainy days

I appreciate that they are pretty limited in their returns but they suit my purposes for the moment

Just curious as to whether anyone has any experience ( good or bad ) with these things

Milarky

I joined one in my area a few years ago - more to do with solidarity than making money. I have found they pay a very low interest rate of 2 to 3 percent - nothing like the rate of 8 percent they are allowed to pay by law. Likewise, they went straight for the legal maximum allowed by charging 1% per month [12.68% pa] interest on loans.

I'm sticking with them for now, but it has crossed my mind to leave or set up a rival CU organisation in the area offering better deals. My feeling is that a CU that pays a small dividend and charges the maximum interest allowed isn't acting in anyone's best interest. And given they are meant to encourage saving and borrowing it would be possible to do far far better than that. By saving regularly with them, however, I am building up a float of money which I can take and pay into an improved CU at some stage to get them off the ground.

[Maybe I'll blow it all on 'ZOPA' instead?]