Credit unions.

[Deleted User]

Hello,
Don't know if this is the correct  place for this thread but it's about a saving account  in this instance. 
I'm thinking about opening  a saving account  with a local credit union  does anybody have any experience  with them?
I know you don't get interest in them only dividens but it more about helping my local area.
Not a huge amount  maybe £5-10 per month.

wmb194

[Deleted User] said:

Hello,
Don't know if this is the correct  place for this thread but it's about a saving account  in this instance. 
I'm thinking about opening  a saving account  with a local credit union  does anybody have any experience  with them?
I know you don't get interest in them only dividens but it more about helping my local area.
Not a huge amount  maybe £5-10 per month.

*dividend. Note that dividends paid by credit unions are taxed as interest.

eskbanker

[Deleted User] said:

I'm thinking about opening  a saving account  with a local credit union  does anybody have any experience  with them?

Probably worth specifying which credit union you're referring to, or are you really just interested in the principle of using a credit union?

Last time I checked, the annual FSCS reports on which deposit-taking institutions they'd had to step in and reimburse savers for, they were all credit unions, but that probably reflects their small scale rather than flaws in the concept itself....

Edit: yes, more of the same in the most recent report:

During 2022/23, we had five credit union failures which resulted in approximately £4m in compensation being paid to customers. The firm failures and associated compensation included:

• Birmingham Inner Circle Community Credit Union Ltd – £1.3m in compensation;
• North East Warrington Credit Union Ltd – £1.3m in compensation;
• City of Plymouth Credit Union Ltd – £1m in compensation;
• Gloucestershire Credit Union Ltd – £0.6m in compensation; and
• Rainbow Saver Anglia Credit Union Ltd – £57k in compensation.

https://www.fscs.org.uk/globalassets/industry-resources/publications/annual-reports-and-class-statements/arac-2223/fscs-class-statements-2022-23-accessible.pdf

[Deleted User]

eskbanker said:

[Deleted User] said:

I'm thinking about opening  a saving account  with a local credit union  does anybody have any experience  with them?

Probably worth specifying which credit union you're referring to, or are you really just interested in the principle of using a credit union?

Last time I checked, the annual FSCS reports on which institutions they'd had to step in and reimburse savers for, they were all credit unions, but that probably reflects their small scale rather than flaws in the concept itself....

The principal I suppose. Yes it looks like a small scale operation by its online site and looks like its been created awhile ago and not updated for a bit. "Dragonsavers."

Beddie

I like the concept of credit unions, but not gone as far as putting any money in one. I think they are a good way to help the local community though.

itsthelittlethings

I have a credit union account, put £10 in every week to save towards holidays. I don’t think I’ve seen any dividends yet (not sure). But they do charge about £2 a month operating fee. The main reason I have it is it’s not particularly easy to access so it encourages me to save. Also to support the credit union.

TheBanker

I have a modest deposit with my local Credit Union, because I want to support the CU. I think the work they do in encouraging people to save is important, as well as providing an alternative to payday lenders and loan sharks for people who need to borrow.

My CU actually have a couple of attractive regular savings accounts at the moment, which pay a bonus if you contribute a certain amount for a certain number of months. The bonus is funded by some money they were awarded that was confiscated from illegal loan sharks under the Proceeds of Crime Act. I have not taken up these accounts as the funding for the bonuses is limited and I'm not really their target market. 

The most important thing my CU does (in my opinion) is encourage children to save. They go into local schools so children can open and pay into savings accounts. The logic is that this encourages children to get into the savings habbit, but is also a good way to reach their parents. When I was a child, I opened my first bank account with the Midland Bank (now HSBC) through a 'school branch' and got into the savings habbit by paying in £1 a week. The banks don't do this any more, so I am pleased the CU have been able to step into this space.

powerspowers

I save with my credit union. I like the idea that my money benefits the local community rather than investing in fossil fuels/war etc. They work with families setting up home for the first time, Ukrainian refugees- people that mainstream lenders won’t touch. Members got 2% dividend this year so it does pay less than savings accounts elsewhere, although this was less of a consideration when interest rates were lower. 

Your savings are protected. I also save in other accounts. Some CUs are very slick, operating mainly online with all the apps etc that a mainstream banks offer. Others are much smaller, sometimes staffed by volunteers. There has been a trend of smaller unions being merged into bigger unions as it’s a difficult market to operate in, and as a previous poster said, some folding. 

I’d have a look around on https://www.findyourcreditunion.co.uk/ and see what options you have locally, usually 2 or 3 cover an area and there are also employment based credit unions where members all work in similar industries. 

[Deleted User]

itsthelittlethings said:

I have a credit union account, put £10 in every week to save towards holidays. I don’t think I’ve seen any dividends yet (not sure). But they do charge about £2 a month operating fee. The main reason I have it is it’s not particularly easy to access so it encourages me to save. Also to support the credit union.

£2 per month seems a lot.
The one lve had a look at charges  £2 every October.  My thinking is not easy to get hold of saving so would work in my favour.:)

[Deleted User]

TheBanker said:

I have a modest deposit with my local Credit Union, because I want to support the CU. I think the work they do in encouraging people to save is important, as well as providing an alternative to payday lenders and loan sharks for people who need to borrow.

My CU actually have a couple of attractive regular savings accounts at the moment, which pay a bonus if you contribute a certain amount for a certain number of months. The bonus is funded by some money they were awarded that was confiscated from illegal loan sharks under the Proceeds of Crime Act. I have not taken up these accounts as the funding for the bonuses is limited and I'm not really their target market. 

The most important thing my CU does (in my opinion) is encourage children to save. They go into local schools so children can open and pay into savings accounts. The logic is that this encourages children to get into the savings habbit, but is also a good way to reach their parents. When I was a child, I opened my first bank account with the Midland Bank (now HSBC) through a 'school branch' and got into the savings habbit by paying in £1 a week. The banks don't do this any more, so I am pleased the CU have been able to step into this space.

Thank you for input.

[Deleted User]

powerspowers said:

I save with my credit union. I like the idea that my money benefits the local community rather than investing in fossil fuels/war etc. They work with families setting up home for the first time, Ukrainian refugees- people that mainstream lenders won’t touch. Members got 2% dividend this year so it does pay less than savings accounts elsewhere, although this was less of a consideration when interest rates were lower. 

Your savings are protected. I also save in other accounts. Some CUs are very slick, operating mainly online with all the apps etc that a mainstream banks offer. Others are much smaller, sometimes staffed by volunteers. There has been a trend of smaller unions being merged into bigger unions as it’s a difficult market to operate in, and as a previous poster said, some folding. 

I’d have a look around on https://www.findyourcreditunion.co.uk/ and see what options you have locally, usually 2 or 3 cover an area and there are also employment based credit unions where members all work in similar industries. 

Yes the one lve got my eye on is small scale,  it's in my area so l know it will help local people. 
Thank you for input.