The Co-operative movement has a long tradition of financial prudence and support for members. Parents and grandparents will remember saving the ‘Divi’ on food purchases or even opening a share account at the local Co-op. The Co-op has moved on with its own Co-operative Bank plc although it still retains much of what was good about old traditional co-operative societies.
A new interest in Credit Unions has developed to fill the void between the old local Co-op, friendly societies and banks. Credit unions are financial co-operatives owned and controlled by their members. Credit Unions exist to offer savings and loan facilities to members. They can usually claim to be local, ethical and know what their members want.
Borrowing From a Credit Union
Contact your local credit union or one linked to your region, employer or association, such as a church or trade union. A ‘common bond’ links members with rules and common links.
Credit union loans should come with no hidden charges and no penalties for repaying the loan early. Life insurance is usually built in, at no cost to the borrower, so if you were to die before repayment insurance would repay the loan. Terms vary so check them out carefully. You can often repay over a time of up to 5 years or even 10 years if you have some security.
After you have repaid the loan keep up the monthly payments as a painless way of saving. This helps the credit union, your financial co-operative, find the funds to lend to others.
Save with Your Credit Union
Saving money with a credit union is usually made simple using local shops and collecting facilities that allow deposits as and when. Regular savings mount up best. Interest is earned annually in the form of a dividend based on the Unions performance. This has been as much as 8% of the amount that people have saved, but is typically 1- 3%.
Investing in your local credit union, the only people you are benefiting are yourself and your fellow members not shareholders and large head office overheads. Credit unions keep money within a community because there are no outside shareholders to pay.