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Credit Union - am I doing them any good by putting some money in and not using the account?
Murmansk
Posts: 1,100 Forumite
Because I like the idea of Credit Unions - better than people getting money from loan sharks - I put a few hundred pounds in my local one to support them. No interest paid.
I'm now wondering if this actually does them any good?
Do they have to deposit an amount equal to my deposit with the Bank of England for security purposes or something? If so, I guess maybe my deposit's no use to them or anyone else and they probably make what money they do make from charging borrowers interest (albeit at a non-extortionate rate).
I'm now wondering if this actually does them any good?
Do they have to deposit an amount equal to my deposit with the Bank of England for security purposes or something? If so, I guess maybe my deposit's no use to them or anyone else and they probably make what money they do make from charging borrowers interest (albeit at a non-extortionate rate).
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Comments
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It allows them to lend the money to others and make a profit.0
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The whole point of a credit union is that some people save money with them so that they can lend money to some others. So yes, you are doing them some good. Stop over-worrying!0
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Because I like the idea of Credit Unions - better than people getting money from loan sharks - I put a few hundred pounds in my local one to support them.
I do the same and for the same reason.
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And, to add to my comment yesterday, by "not using the account" you're actually doing them a double favour, as not only are you funding their activities you're not costing them anything in admin.
And also to add: I have small amounts of money in 3 different credit unions (and once upon a time I had a lot in one of them, but that was when interest was interesting). I've never used their services for anything, just feel they're worth supporting.0 -
Well this one doesn't!!hangryconsumer said:Don't all credit unions pay a dividend?0 -
LCCU paid 0.5% last financial year.0
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Your credit union sounds a bit mean. Most do offer interest rates on savings and/or a dividend at the end of 12 months.Murmansk said:Because I like the idea of Credit Unions - better than people getting money from loan sharks - I put a few hundred pounds in my local one to support them. No interest paid.
I'm now wondering if this actually does them any good?
Do they have to deposit an amount equal to my deposit with the Bank of England for security purposes or something? If so, I guess maybe my deposit's no use to them or anyone else and they probably make what money they do make from charging borrowers interest (albeit at a non-extortionate rate).
This has just recently been posted on this mse site, might be of some interest -
https://www.moneysavingexpert.com/loans/credit-unions/
Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.0 -
Some credit unions have introduced an annual membership fee so check if this applies. Mine has, £5 per year, but the dividend more than offsets this.0
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I pay £3 per year and get zero!0
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