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Why Use A Credit Union

About

What are Credit Unions

Credit Unions are financial co-operatives that are owned and democratically controlled by their members. Credit Unions provide members with flexible savings and loans in the same way as banks but there are key differences between them:

Credit Unions:

  • Not-for-profit
  • Owned by members
  • Dividend paid to members

Banks/Other Financial Institutions:

  • Profit-driven private companies
  • Owned by external shareholders
  • Dividend paid to shareholders

This business model enables credit unions to pay dividends to their members but also provide them with lower-cost loans, higher savings rates and fewer service fees.

What is the common bond between members?
The common bond is the factor which is the qualifying criteria for membership to a particular credit union. In other words, it is what all members have in common. Typically, there are three categories of common bond:

  • Community Bond
    Where all the members live or work in a particular locality. i.e. a City, a town or specific post-code areas.
  • Occupational Bond
    Where all members are in the same profession, occupation or work for the same employer.
  • Associational Bond
    Where all the members are in the same society or association.