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Saving with Credit Unions

A credit union offers you the opportunity to put your savings into your own community. read more >

 

// Credit Unions

What is a credit union?
A credit union is a savings & loans co-operative, owned and run by its members for the benefit of the members. A credit union is authorised and regulated by the Financial Services Authority, just as banks and building societies. All members are shareholders in the credit union and have equal voting rights. This means that as a member, you directly influence the operation of your credit union and the services it provides!

How does it work?

By saving with the credit union, members create a pool of money that can be used to grant affordable and straightforward loans to members. All the profit that the credit union makes, from investments and interest on loans, is returned to the saving members at the end of each financial year. All savings and loans come with free live insurance, and the credit union is part of the  Financial Services Compensation Scheme, just as banks and building societies 

How does a credit union differ from banks and building societies?

A credit union is not only a financial co-operative: it is also a social enterprise. Social enterprises are professionally run businesses with a social goal. The social goal of a credit unoin is helping people from the common bond in which they operate. The services offered by credit unions are therefore as affordable and straightforward as possible.A credit union provides a local, friendly, and flexible service: the credit union's mission is to satisfy the needs and wants of its members and to support the development of it common bond.

What is a 'common bond'?

Other than banks and building societies, credit unions are formed around a common bond. This is a recognised group of individuals who share a common interest. The common bond establishes a degree of mutual accountability amongst the membership, which encourages active support and a responsible attitude of members towards their credit union. For the Oxford Credit Union, the common bond will be 'living and/or working (including voluntary work) within the Oxford City Council boundaries.

What is the main business of the credit union?

The main business of the credit union is composed of savinsg and small consumer loans. A credit union encourages its members to save regularly, if only small amounts. Even a small amount adds up! Saving is possible through payroll deduction, PayPoint, standing order, or one of the many credit union collection points.

The savings form a pool of money that can be used to offfer affordable loans to the members. The legal maximum interest rates for credit unions is 1% per month on a declining balance. This is an APR of 12.68%. There are no arrangement fees, no early repayment penalties, or other hidden charges.

What other services does the credit union offer to me?

Your credit union provides you with a basic financial services package: you can save, borrow at favourable rates, cash cheques, draw your benefits or pension at your local collection point, and obtain basic financial advice. The credit union will do everything it can to provide the service you need. The Oxford Credit Union is planning to offer small business loans that come with free business advice, interest free loans for fuel poverty, and a remittances service. If you have any wishes for a particular service, please let us know and we will try to arrange it.

How can I influence the running of the credit union?
Each year, the Annual General Meeting elects the directors and officers of the credit union, who are accountable to the membership. This means, that by voting, you can influence the running of the credit union. You can even stand for election and become an active part of the governance of the credit union! The elected Board of Directors has end responsibility for the day to day running of the credit union. The Board formulates policies and ensures that the credit union adheres to the legal requirements. In addition to the Board of Directors, the credit union has a Credit Committee, responsible for the loans business of the credit union. It also has an Audit Committee, which makes sure that the credit union takes care of its members' money. The Board, Credit Committee, and Audit Committee report to the members at each Annual General Meeting.
Why should I join the Oxford Credit Union?

Whether you will become a saver or a borrower; credit union membership makes financial and social sense for you as well as for your local community. As a saver, you have the knowledge that your savings are safe and profit returning. In addition, you know that your savings are used to help people from your own community, by granting them affordable loans. As a borrower, you have the knowledge that the credit union provides you with an affordable and flexible loan, with free life insurance and no charges for changing your repayment schedule.

 

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