Commsave

CashMoney

Has anyone heard of this credit union? Has anyone got a savings account with them? Apparently they pay in dividends rather than interest but they have been giving out the following:

2017 - 2.5%
2018 - 2%
2019 - 2%
2020 - 2%

I am eligible through my workplace so seems tempting as the rate is alot better than any easy access saving accounts out there and it is easy access. Thoughts?

Be_In_That_Number

I opened an account with Commsave last year. I don't have experience of earning interest/dividends yet but the set-up of accounts and viewing balances/making payments online seems straightforward.

Added boon on these rates (I think 2019 was actually 2.25%) is that as a dividend it is non-taxable as long as you're below your annual dividend allowance.

Only word of warning is that at January Commsave proposed to restrict its member organisations, so may be harder to qualify now.. I can't find a link online unfortunately.

Malthusian

I would use caution as "dividends" usually come from capital-at-risk investments that are not covered by the FSCS.

It is possible that the product is a deposit with a variable return akin to sharia deposits. However the website is extremely vague and does not provide full terms & conditions of its products on the website which enable the investor to establish whether their product is a regulated deposit, at least not prior to starting the application process. It has vague waffle about being covered by the FSCS but that is not the same thing. The lack of disclosure is enough for me to steer clear. It would not be the first capital-at-risk product masquerading as a deposit and offering a rate only slightly better than deposits (*cough* Castle Trust).

Credit unions go bust on a regular basis (at least 1 in 4 have gone bust in the last 15 years) so should not be used for day-to-day cash, due to the high probability of needing to call on the FSCS at some point.

Zanderman

Malthusian wrote: »

I would use caution as "dividends" usually come from capital-at-risk investments that are not covered by the FSCS.

It is possible that the product is a deposit with a variable return akin to sharia deposits. However the website is extremely vague and does not provide full terms & conditions of its products on the website which enable the investor to establish whether their product is a regulated deposit, at least not prior to starting the application process. It has vague waffle about being covered by the FSCS but that is not the same thing. The lack of disclosure is enough for me to steer clear. It would not be the first capital-at-risk product masquerading as a deposit and offering a rate only slightly better than deposits (*cough* Castle Trust).

Credit unions go bust on a regular basis (at least 1 in 4 have gone bust in the last 15 years) so should not be used for day-to-day cash, due to the high probability of needing to call on the FSCS at some point.

That's all rather over-alarmist.

Credit Unions are FSCS protected. They use savers' money to give loans to other members. The 'dividend' is merely the profit (if any) shared out at the end of each year. It's a term, in this context, used merely for that, instead of offering a definite interest rate. The underlying deposit is protected. There's nothing more sinister than that. as far as I'm aware. No point in looking for 'disclosure' about investment as there is no investment.

But also no point in relying on past performance as an indication of future 'dividends' as these will vary and may be tiny.

Commsave also, btw, participate in the Prize Saver initiative - a Government scheme to encourage savings, and use of Credit Unions, with a prize draw, like a mini premium bond system. Details are on their site. Other credit unions also take part.

And yes, CU's do go bust. Others thrive. Deposits are always returned under FSCS.

Edited to add: I say all this as a contented member of three different Credit Unions - one with fixed interest rates, one that gives dividends (but really rubbish ones!) and one that partakes in the PrizeSaver initaitive.