A credit union is a financial co-operative, similar to a bank, that provides saving and loan products. Unlike a bank, credit unions are non-profit financial institutions.
Credit unions operate for the purpose of promoting thrift and saving money, providing credit at reasonable rates, and providing other financial services to their members.
A credit union only provides services to its members, taking their deposits and extending mortgages and loans to them. In addition, a credit union is owned by its members.
Membership of a credit union often depends on the members having a common bond. This could, for example, be living in a specific area or belonging to the same housing association or trade union.
Credit unions aim to help people take control of their money by encouraging people to save what they can. Once a member has a reliable record as a saver, they can then apply to borrow money from the credit union, which will allow them to borrow what they can afford to repay.
Some credit unions offer more than just savings accounts and loans and they often play a very important role within their local community on behalf of their members.