Why do people open credit union accounts?

D

DeeKie

Registered User
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I was having trouble explaining credit unions to someone recently and recognised that I don’t fundamentally understand them. Why do people open credit union accounts? If you’re financially stable and don’t need to borrow is there any advantage to having one? Is there a website comparing CU offers?
 
I joined years ago when they were easier than banks to get a loan and if you had savings you got a bit of interest. My borrowing days are over and my credit union has not paid any interest in years.

The only reason I stay a member is for the monthly draw.
 
I have a credit union account although I don't expect to borrow. It's only got the minimum €50 or €100 in it.

There is no downside in having an account.

If it turns out that you do need to borrow e.g. for upgrading your house, it might be quicker than topping up your mortgage. The rate will be much higher than the mortgage rate but you won't face legal costs, so it might be ok for short-term borrowing.

A website comparing CU offers would be interesting but not useful. You must be a member of the common bond. So the best mortgage rates are in St Raphael's Credit Union, but that is for Gardai only, and it's not worth becoming a Garda to avail of them.

Brendan
 
Des Pondent said:
I joined years ago when they were easier than banks to get a loan and if you had savings you got a bit of interest. My borrowing days are over and my credit union has not paid any interest in years.

The only reason I stay a member is for the monthly draw.
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That’s interesting. Have you ever won? What could you win?
 
Credit Unions to me have moved away from their original concept and are more being coming banks these days.
Original it was a community idea run by locals for locals. the savings that you put in would help others locally get loans. If your loan was less then your shares the loan was approved there and then otherwise it was approved by a credit committee who meet weekly.
There was also death benefits such as giving twice the value of your shares in your next of kin.
Also when the legislation was drafted there was a carve out that money in a credit union passed at date of death not via the estate so it could be access straight away to help with funeral costs.
 
DeeKie said:
That’s interesting. Have you ever won? What could you win?
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No, I have not won anything yet, I believe every Euro that goes in, then goes out in prizes so a lot better odds than prize bonds, Lotto etc.

My credit union have a €10,000 cash draw I think 8 times a year. The bigger ones have cars and several other cash prizes every month, and even more at Christmas.

I left a small amount there, every February they deduct a €1 affiliation fee to stay a member and €52 for the monthly draws.
 
I opened one years ago to set up a holiday savings account, not being able to withdraw the cash at a machine was a discipline for me.
I’ve borrowed a couple of times, I like that I can repay with lump sums now and then if I want to. Then I set up a small SO from my current account and now I have a substantial amount in there, almost by accident.

I admire the ethos and principles, although I was concerned about governance a few years back but the central bank have them under a watchful eye now and the mergers have made more professional management feasible.
 
My parents keep a credit union account so they can avail of a group discount for private health insurance.
 
A very useful element of my CU account is that I can have a nominated person (my wife in my case) who in the event of my death can withdraw the balance of my account (to a max of 27k) without probate.
Just the production of death cert.
 
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A good idea for kids. Physically handing their savings over a counter for a rainy day down the road. Conceptually better than giving them a Revolut that just gets topped up by the bank of mum and dad.
 
Convenience.
Free life insurance.
Discount on my home and health insurance.
Discount for joining the local swimming pool/gym.
Two free calendars plus year planner annually.
and, last but not least,
Good nosh at the CU AGM!
 
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Dr Strangelove said:
A few reasons:
- people feel money is inaccessible, good for saving
-being able to speak to a human
-some open on Saturdays
-convenient locations often in suburban areas or small towns with no banks
-professional credit unions (Garda, CU) will deduct savings from payroll
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Absolutely agree with all of that. Not only speak to a human but actually speak to a human who is friendly and happy to deal with you.
 
I opened an account as a teenager and saved up the princely sum of IR£500 towards my first car. Wanted to borrow £1,500 for the car but needed the £500 for insurance- insurance was 20% of the value of a 2 year old Ford Escort! Ended up borrowing from AIB! Over the years, it's been a convenient place to cash or lodge cheques borrow small amounts and I became a director for many years. When the banking crisis hit, credit unions were the only place lending. In good times, nobody needs the credit union but, when the financial institutions tighten up, they can help a lot of people. However, in the past 15 years or so, the Central Bank has greatly increased supervision and regulation of CUs.

I stay now mainly for the insurance, but it is a dark art and it's not obvious how payouts are calculated.
 
Apart from:
- most having fully functional current account connected to the world
- most have advanced mobile app
- lower charges
- many have mortgages
- dividends have started in several
- local operations and real people
- online facilities for savers even if you do not have current account
- a lender that listens and did an awful lot during the banking crisis
- did not get bailed out though a report showed projected losses of €500mn which was b/s
- totally over-regulated based on line above
- nomination outside will for €27k
- overall far more sophisticated than many on here realise
- free life cover on loans
- debit card as good as any other
- community based
- largest non-mortgage lenders in State
- Board members voluntary without fees - some of you should go forward even for mutual benefit particularly er...

Other than above what have Credit Unions ever done for us?
 
Slim said:
I stay now mainly for the insurance, but it is a dark art and it's not obvious how payouts are calculated.
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Well the life insurance on a loan is particularly complex - they pay it off when you die er...that's it except that you are not charged for it.

Those that provide Life Savings Insurance - usually have a document telling you how its calculated - basically the earlier you save and keep the bigger the payout. Free again with T&Cs.
 
One other feature I like with credit unions relating to their current account is that the phone me whenever I set up a new payee and initiate a transfer, just to ensure it is me who is transferring out the money. A simple old fashioned security check.
 
POC said:
My parents keep a credit union account so they can avail of a group discount for private health insurance.
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Marsupial said:
Discount on my home and health insurance.
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I enquired from a few credit unions and VHI a year or two ago about the discount on health insurance and they confirmed that it is long gone by the wayside but still the credit unions insist on using it in their advertising.
 
Key reasons for me joining were
  • Had a worthwhile, no charge death benefit scheme
  • Operated with very low overheads and returned surplus to members by way of a decent dividend each year
  • Offered group scheme for 10% VHI discount
None of these apply today so I have no reason to recommend them
 
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