A credit union provides loans, savings, bank accounts and other services to their members. They are designed to help the community rather than make money, often accepting people who’ve been turned down for accounts and loans elsewhere.
What is a credit union?
A credit union is a not-for-profit financial provider that helps people access banking products like bank accounts, savings and loans.
They’re usually:
run by members to benefit communities, rather than to make a profit
able to help those turned away by other providers.
You’ll need to become a member, which normally means being asked to pay a small fee (for example, £2) or save a certain amount (such as £10).
Who can join a credit union?
Credit unions work by all members sharing a ‘common bond’. For example, you might:
- live, work, study or volunteer in a certain area
- work in the same industry or for certain employers
- belong to the same trade union.
What ID will I need?
You’ll usually need to provide two recent documents to prove your identity and address. For example:
- passport
- driving licence
- student or work ID card
- bus pass
- birth certificate
- bank statement or energy bill.
Most credit unions list the documents they’ll accept online. If in doubt, contact them to check.
Credit union accounts you can get
Most credit unions offer:
Savings accounts – these either pay interest or a share of any profits. You can find more information about these in credit union savings accounts.
Loans – interest rates are capped, but you might need to have a certain amount saved with the credit union before you can apply. See borrowing from a credit union for more help.
But some will also offer insurance, prepaid cards, mortgages and current accounts.
Credit union bank accounts
This works like a current account from a bank or building society, but usually has charges for certain features.
For free, you can usually:
- pay in or take out cash at the credit union
- have money paid in, such as wages, benefits and pensions
- use online, mobile or telephone banking
- get budgeting advice and support.
You’ll often need to pay a monthly account fee for:
- a debit card for spending or using cash machines
- setting up regular payments, such as bills via Direct Debit
- access to borrow money using an overdraft – normally with daily interest up to 42.6%.
You might be charged each time you use a cash machine to withdraw money or view your balance, so always check. Some accounts will also require you to pay in a minimum amount each month, such as £80.
You usually won’t have to pass a credit check, even if you apply for an overdraft. Credit unions normally use manual checks to decide whether to lend to you.
Other bank accounts to consider
Before opening a credit union account, there are other options that might be cheaper:
a bank or building society current account – usually the first port of call for most to try
a basic bank account – this offers most of the same features as a typical current account (except an overdraft) and most people will be accepted so it might be suitable for those with a poor credit history, convictions or people in prison
a prepaid card account – you can use this to spend and withdraw cash, but you can’t usually set up payments like Direct Debits or receive your salary or benefits into it.
Our compare bank accounts tool lets you view account features, fees and charges. Or we've step by step help in how to choose a bank account.
Your money’s protected if a credit union goes bust
Just like most banks, up to £85,000 per person is protected in a credit union account. Find out how the Financial Services Compensation Scheme (FSCS) works.
Have you missed a payment?
Use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live.
How to find a credit union
To search for one you can join, use:
- In England, Scotland and Wales:
- In Northern Ireland:
How to complain about a credit union account
If you have a problem with a credit union, follow these steps:
- Contact customer services. Let them know:
- why you’re unhappy
- what they should do to put things right. If you can’t agree:
- Ask to make a formal complaint. They have eight weeks to investigate and give you their final response. If you’re unhappy with this, or the timeframe has passed, you can:
- Take your complaint to the free Financial Ombudsman Service (FOS). You’ll get an independent decision on whether the firm’s response was fair or if they need to do more.
For more information, see our full how to complain guide.
