Are these Credit unions trustworthy (8% rate)

newDude

Anyone saved with a credit union? According to a site i visited they are offering upto 8%. They seem to be regulated by the FSCS , so should be covered for £85K, although (don't know why) i wouldn't trust them with that much, a couple of thousand perhaps.

http://www.findyourcreditunion.co.uk/about

SnowMan

Savings with credit unions are as you say protected in the same way as savings with any bank i.e. the usual the 85K FSCS protection so no worries there.

Traditionally credit unions apply a dividend each year to savers accounts. The amount of dividend is not known in advance. So the unknown is how much and even whether a dividend will be given. Worth looking at what your credit union has given recently via the dividend although that won't necessarily be repeated.

Under changes under the Legislative Reform Order some of the larger credit unions will be able to offer a specified rate of interest in advance similar to how it works with banks and building societies.

Even if the returns on credit union savings don't turn out as much as the top rates from banks and building societies many savers in credit unions save for ethical reasons. Being community based organisations run as non-profit making co-operatives, and run mainly by volunteers, they provide both a sense of community, keep money within the local community, and are an important alternative for people borrowing money to door step lenders and payday loan providers.

Saving with a credit union can mean you can borrow money at a later date if you should need it. Some of the individual credit union rules are along the lines that if you save for a certain period you can borrow a multiple such as 3 times what you have saved. They do usually offer loans for people who haven't saved with them as well (provided the applicant has the means to repay).

We don't have a credit union in our area at the moment so I am not able to join one myself.

G51shopaholic

Been with our local credit union for over 20yrs. Great service.

don't know where u get 8% from as most of the Credit Unions have had local funding cut - this was used to cover wages; rent etc. Also Insurance increases have doubled so the Credit Unions have been squeezed dry.

My own Credit Union had to increase loan rate to 12% and dividend was 3% but at shareholder meeting majority agreeded to forfeit dividend inorder to prevent 2 staff being made redundant. They used volunteers and one lady has been working there for over 30yrs!!!

Loan rate is really good as there's no gimmicks and for all the years I've used them I have NEVER been refused.

Ark_Welder

SnowMan wrote: »

We don't have a credit union in our area at the moment so I am not able to join one myself.

Some credit unions are open to members on a national basis depending upon either an individual's employer or membership of specific associations or groups:

http://www.findyourcreditunion.co.uk/home

newDude

G51shopaholic wrote: »

don't know where u get 8% from as most of the Credit Unions have had local funding cut

It was posted on that website http://www.findyourcreditunion.co.uk/about


"Credit unions aim to pay a dividend on savings once a year to all it's members. Dependent upon performance this can be as much as 8% of the total amount that people have saved."

So, if the dividend is not guaranteed, i'm out. I'm not doing it to get a warm, fuzzy feeling, i'm after a return.