What is a Credit Union?
Credit unions are not for profit financial co-operatives which provide accessible savings, low cost loans and help members to manage their money more effectively.
As they are owned locally and controlled by individual members and volunteers, credit unions have a clear commitment to mutuality, community and social goals.
They are a resource for all in the community – as they capture and recycle money within the local economy they therefore can contribute to community regeneration.
There are currently 6 credit unions in Fife. Collectively they have over 7,000 adult members and hold over £5 million in members’ savings and have loans of over £2.5 million. Each credit union offers a slightly different range of services.
Can anyone become a member?
Yes, anyone can join a credit union. Each credit union serves what's called their “common bond” - the commonality between members. You may be eligible to join a credit union based on your:
- Employer - many employers sponsor their own credit unions. For example, Tay Valley Credit Union is specifically for Fife Council employees.
- Geographic location - most credit unions serve anyone that lives and works in a particular geographic area
What are benefits of joining a Credit Union?
· Credit unions are owned by the people who use their services, not by external shareholders or investors, so they emphasise providing the best service to members, not maximising profits
· All credit unions offer savings accounts and loans. Many offer a wide choice of additional products such as junior savings accounts and prepaid debit cards
· All deposits in a credit union are protected by the Financial Services Compensation Scheme up to the value of £85,000 per person – exactly the same level of protection as savings in a bank or building society
· There are no hidden charges or fees on any transactions and no early settlement fees
· The maximum any credit union will ever charge for a loan is 3% per month on the reducing balance, which works out as 42.6% APR.
· The vast majority of credit union loans are made well below the maximum interest rate. A Government-commissioned study in 2013 found credit unions offer the best value on loans up to £2,000, and some credit unions will charge interest rates of 5% APR or even less for larger loans of over £5,000
· All credit unions are regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
For more information or advice please call Fife's Credit Union Development Team on 01592 645367.
To learn more about the financial services Credit Unions provide to communities across the world, visit the World Council of Credit Unions at www.woccu.org.