Can Credit Union Withdraw Money For Credit Card Payment?

Generally, you can save large or small amounts weekly, monthly or whenever you have spare cash.

Bigger credit unions may have online banking meaning you can pay in online, and have branches and collection points such as local post offices; some smaller unions will have just a couple of opening hours a week and likely be based in a community centre or church hall.

You don't know what interest you'll get until the end of the year

Credit union savings usually offer adividend rate rather than an interest rate. This means that it depends how well the credit union does that year - so you don't know what you'll get until the end of the year. Typically, dividend rates are 1-3%, but it could be as low as 0% or as high as 8% of the sum saved.

Dividends are paid before tax, so it's up to you to declare tax on any earnings, though they fall under the personal savings allowance, so you may not need to pay any tax.

It used to be that some credit unions paid more than the top high street savings accounts. This has taken a dip somewhat in recent years, but it can still be possible to find decent rates.

Check your local credit union: Use ABCUL's Find Your Credit Union website to find your local union and what it's offering for its savings accounts.

But you can sometimes get a fixed savings account

Some credit unions, usually the larger ones with thousands of members, now offer accounts with advertised interest rates, like bank savings accounts. You can identify these as they'll have a rate, and it'll say "AER" (Annual Equivalent Rate) after it.

Most credit union savings accounts aren't table-topping, but there are some decent rates out there if you search.

RetailCURe is a credit union for the retail industry which launched in May 2017. It was offering market-leading, fixed-term savings accounts, though currently it's only got easy-access savings accounts.

Find what your local union's offering:Use ABCUL's Find Your Credit Union website to find your local union.

Some even offer cash ISAs

Some credit unions now offer cash ISAs as part of their savings range. A cash ISA is a savings account you don't pay tax on, but there's a limit to how much you can save each year (currently £20,000). For more information on ISAs, read the Cash ISA guide.

Some credit unions offer cash ISA accounts which get close to rates offered on the high street. For example Partners Credit Union, which is open to anyone who lives and works in Merseyside, offers a projected 0.5% AER on its cash ISA account.

Use ABCUL's Find Your Credit Union website to find a credit union you can join.

How do I pay in and withdraw money?

You can pay in at the local credit union office, or sometimes through a post office. Some accept BACS or debit card payments. If you're with one of the employment-linked unions, you're often allowed to save direct from your payroll, which makes the process much easier.

Withdrawals can be made directly at your local credit union office, by cashing a cheque at a post office, or, with some of the larger unions, with a debit card from an ordinary high street cash machine. The larger credit unions now allow online withdrawals to a specified account.

Can I get any other benefits?

Life savings insurance is included with most savings accounts, at no extra cost. If you die your savings can be as much as doubled by the insurance and paid to whoever you choose. Further details on this are available from the individual credit unions.

Broadly speaking, savings in a bank or credit union are protected up to £85,000. Our Are my Savings Safe? guide tells you full info of what protection's out there, and lets you check if your credit union is protected.