Credit union savings

ircE

I recently joined the London Capital Credit Union and today received a newsletter from them recently advertising their various savings accounts - pets & vets, dental, etc. savings accounts.

I'm wondering, is there any actual benefit to saving in these accounts as opposed to any old savings account? Or is it a psychological thing, so that you don't dip into your dental savings account for your holiday?

Daliah

Some people like to divide their money into "pots", so several providers offer this facility. Most of those who do offer this will let you name the accounts as you like.

Credit Unions generally have terrible interest rates, if they offer any interest at all. Often they decide retro-actively what dividend you get paid. IIRC, LCCU paid a dividend of 0.5% for 2021.

If you want a more predictable interest rate, and want accounts with pots, check Chase UK or Virgin Money, both paying market-leading 1.5% or more on their instant access savings. Note, however, with inflation running at 9%, money in any savings account will lose purchasing power.

ircE

Thanks. I actually joined for the ethical finance aspect rather than chasing interest. I was just wondering if there was any benefits to these pots, but I guess not.