Do you know what a Credit Union is?

Posted on February 17, 2022

At Eastern Savings & Loans Credit Union we offer a range of loans, savings accounts and a current account too.

Credit unions, although not widely known are the fastest growing alternative to banks, building societies and doorstep/payday lenders. Profits made by credit unions are used to reward the members, and not pay shareholders or big bonuses unlike the banks and other lending businesses.

Credit unions are for everyone.

You are more than a member, you are a part-owner. All credit unions are owned and controlled by their members, who use their services. Your vote counts, you can become involved in decision-making by attending the AGM or other member meetings.

The volunteer board of directors is elected by the members to manage the Credit Union. This year we have two directors up for re-election. Each member’s ideas and opinions are valued equally no matter how much or how little they have in savings.

We operate to support the financial well-being of our members. Profits made are returned to members in the form of lower loan rates, reduced fees and a dividend on their savings. Our members to voted at the AGM to give a dividend of 0.15% on the average shareholding over the financial year 20/21.

What type of savings accounts do they do?

All credit unions are authorised and regulated by the Financial Conduct Authority (FCA) and also covered by the Financial Services Compensation Scheme (FSCS). Our dividend savings account is ultra-flexible allowing you to save large or small amounts weekly, monthly or whenever you can. You can make deposits via standing order, in branch or via Pay Point locations. You can even save directly from your wages.

Our Dividend Savings account also includes built-in life insurance, this means that if you die your savings are doubled and can be paid to a person you specify, (subject to certain terms and conditions).

Are Credit Unions just for people who are struggling financially?

No, credit unions are for everyone. While we are able to offer small loans from £300 which most high street banks will not do, we also offer loans up to £4,000.

One of the loans we offer is called the Child Benefit Savings & Loan Plan, which is a small loan between £300-£500. The repayments are made from the member’s Child Benefit which gets paid into their credit union account. The repayments can be from £12 per week, and we encourage our members to save some of the remaining Child Benefit. This helps local families spread the cost of School Uniforms, School Trips, clothes, and additional expenses that can affect families. By saving while repaying the loan, it can help the family have a pot of money for upcoming expenses and help support financial wellbeing.

All credit unions only offer loans to their members. The interest rates vary depending on the loan amount and each person’s financial circumstances. However, they are considerably less than many other providers for smaller short-term loans. Our loans come with added benefits too, with no charges for early repayments, and free insurance for your loan, (subject to certain terms and conditions).

Do credit unions offer other products?

Some credit unions offer a bank account facility, and it operates very much like a bank account. You can have your salary paid in, set up direct debits and standing orders from the account, take out money at cash machines, and use the debit card in shops and online. Most credit unions will charge you for the account. This is the cover costs as they are not-for-profit entities. At Eastern Savings & Loans we charge £3.50 per month for our Engage Account. The account also comes with Cashback Rewards at a range of national retailers and many members receive more in rewards each month than the account costs.

We also have online and telephone banking services, online loan applications, a Christmas savings club and children’s savings accounts.

You can find out more information about Credit Unions in the UK via the Find Your Credit Union Website, Money Helper or Citizen Advice.