Credit Unions
A Credit Union is a form of financial co-operative owned and run by its members, which provides both savings plans and loans. The unions are no-for-profit organisations, so all earnings made are given back to the members in the form of discounted interest rates on borrowing, or bonuses on savings.
Who are they for?
The membership of a credit union is often made up of people living or working in the same area, but any other group of people can form one - for example, members of a church or club.
They are often set up to provide financial services for people who may not be well catered for by the high street banks, such as those on low incomes or benefits, and as such are in important part of financial inclusion.
Savings Plans
Personal funds can be deposited in a savings plan as when you choose, and a dividend is paid on these savings once a year. A credit union will typically pay around 2% or 3% in dividends, which may not be as high as that available in other investments or mainstream savings accounts, but at least provides some kind of return.
Next: Borrowing money from a credit union >>>
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