BAG Credit Union

BAG Credit Union is a credit union based in the Rhymney Valley in Wales, serving people who live or work in the Bargoed, Aberbargoed, Gilfach and Upper Rhymney Valley area. It offers the two things every credit union offers, savings accounts and loans, plus free life savings insurance for eligible members and loan protection insurance on its loans¹.

Membership is free, and you can save up to £10,000 with the credit union³. To borrow, you need to have been a member saving regularly for 13 weeks or three months, and you can then apply for up to double your shares: save £100 and you could apply for a loan of up to £200³. Loan applicants must be 18 or over³.

Savings with BAG Credit Union are covered by the Financial Services Compensation Scheme, which guarantees deposits up to £120,000 per eligible person, per UK authorised bank, building society or credit union¹. The credit union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 213428⁴.

What BAG Credit Union offers

BAG Credit Union provides savings accounts and loans to its members, along with two insurance benefits attached to those products: life savings insurance and loan protection insurance⁵. That is a narrower range than the largest credit unions, some of which also offer Christmas savings accounts, cash ISAs, budgeting accounts, current accounts, prepaid debit cards and, in a few cases, mortgages⁶. BAG Credit Union's own published services are savings, loans and the two insurance benefits¹.

Credit unions as a group exist to take deposits from members and lend back to members, rather than to pay profits to outside shareholders⁸. All credit unions offer savings accounts and loans; the extras vary by branch⁷. If you want to see how BAG Credit Union compares with the wider sector, our guide to credit unions explains the model, and the savings and loans sections cover the products in general.

One point worth knowing before you join: BAG Credit Union asks members to save regularly, at least on a monthly basis³. If you have a loan with the credit union, continuing to save is a condition of that loan³.

Savings accounts and how they work

A savings account is opened when you join, and you pay in what you can afford. BAG Credit Union asks members to save at least monthly, and you can save up to £10,000 in total³. To activate the account you must deposit at least £5.00 within the first three months, and a minimum of £5.00 is required to keep the account active³.

You can withdraw money whenever you want, provided the money is not pledged as security on a loan and subject to the credit union's rules¹. That last condition matters: if you have borrowed from the credit union, your shares may be held against the loan, so the balance you can actually take out may be lower than the figure on your statement.

Credit unions do not usually pay interest on savings in the way a bank does. Instead, if the credit union makes a surplus, it may declare a dividend after the end of the financial year¹. A dividend is a share of the surplus, not a guaranteed return, and it depends on how much you have saved and how well the credit union has done⁶. Credit unions normally pay a dividend once a year⁶. Our guide to savings accounts sets out how interest-bearing accounts work if you want to compare the two approaches.

Loans: who can borrow and how much

BAG Credit Union lends to members who have been saving regularly for 13 weeks or three months, up to double the value of their shares³. If you have saved £100, you could apply for a loan of up to £200³. Loan applicants must be aged 18 or over³. Repayments can be made weekly, fortnightly, four-weekly or monthly².

If you already have a loan with BAG Credit Union, you must have repaid at least 50% of it before you can apply for a top-up loan³. Top-up loans work by replacing your existing loan with a larger one and a single repayment, which simplifies budgeting but extends the borrowing¹⁰. Credit unions that offer them generally run a credit search and may ask for more information to support the application¹⁰.

The amounts credit unions lend vary widely. Some lend up to £50,000, others up to £62,500, and some personal loan ranges run from £500 to £25,000 over terms of up to seven years¹¹. BAG Credit Union's own limit is tied to your savings rather than a fixed ceiling, which means the amount you can borrow grows as you save³.

Your credit union loan is insured, subject to terms and conditions, at no direct cost to you². Other lenders charge for payment protection insurance; here it is included. Our guide to loans explains how borrowing and repayment work more generally.

Free life savings insurance for members

BAG Credit Union offers life savings insurance at no cost to the member¹. The benefit works like this: every pound you save up to the age of 65 is doubled in the event of your death, provided you do not withdraw your savings¹. The doubling applies to a maximum savings value of £10,000 and is payable to the person you have named on your nomination form¹.

There are limits as you get older. Savings lodged on or after your 80th birthday are not covered by insurance at all¹. Life savings insurance is a common credit union benefit, offered by many credit unions across the UK at no direct cost to eligible members¹⁴.

If you are over 16 you can nominate who is to receive the property of your accounts with the credit union when you die¹. The nomination is a legally binding document instructing the credit union who your beneficiary is¹⁸. If the person you nominate dies before you, the nomination is automatically revoked, so it is worth checking it is still correct¹⁸.

Fees and charges

BAG Credit Union states that there are no hidden charges or fees on any transactions, and no hidden fees or transaction charges on its loans¹. Membership itself is free³.

Where credit unions do charge, it is usually for a specific extra service rather than for holding a savings account. Some charge for a prepaid debit card, and some charge for a budgeting or bills account that pays your household bills for you¹⁹. If you are comparing credit unions, the question to ask is not just what the savings rate is but what the account costs to run month to month.

BAG Credit Union's own site is the place to check today's figures, since charges can change. Our guide to current accounts explains how account fees work at banks and building societies if you want a comparison point.

Who can join: the common bond area

Credit unions work by all members sharing a common bond⁸. That bond can be based on the area members live in, the occupation they work in, or the employer they work for²¹. BAG Credit Union's bond is geographic: you need to live or work in the Bargoed, Aberbargoed, Gilfach and Upper Rhymney Valley area³.

If you are not sure whether you qualify, the credit union asks you to call in to its main office or a local collection point³. Anyone in the household of a person who has a common bond with a credit union can usually join as well, so a family member who qualifies can often bring others at the same address in⁹. Credit unions generally accept members who live, work, study or volunteer in a certain area, work in the same industry or for certain employers, or belong to the same trade union⁸.

To join BAG Credit Union you complete an application form and provide two forms of identity: photo ID such as a passport or driving licence, and a utility bill showing your home address³. Credit unions usually ask for two recent documents proving identity and address, which can include a passport, driving licence, student or work ID card, bus pass, birth certificate, bank statement or energy bill⁸. Having those ready before you apply saves a trip.

How to pay in and withdraw money

BAG Credit Union lists several ways to pay in: a payroll deduction if you work for a participating employer, a standing order from your bank account, payment into the Aberbargoed office or a local collection point, or an Allpay card at any PayPoint outlet or Post Office³.

An Allpay card is a payment card for paying into your account²². You can make payments in cash at shops displaying the PayPoint logo, or in cash, by cheque or debit card at any Post Office²². You can also transfer money from debit or credit cards through the Allpay payment app, which is free to download for Apple, Android and Windows smartphones²². Some credit unions now also let you make a card payment directly into your account through online banking²³.

Withdrawals are straightforward in principle: you can take money out whenever you want, provided it is not pledged as security on a loan and subject to the credit union's rules¹. Credit unions generally pay out by cashing a cheque at a local Post Office, in cash from the credit union office, by payment into a bank account, or by debit card at a cash machine if the credit union runs a current account⁶. Some issue a cheque or bank transfer, or load funds onto a prepaid debit card that carries charges²⁴.

How to open an account or apply for a loan

To join BAG Credit Union you complete the application form provided by the credit union and provide two forms of identity: photo ID such as a passport or driving licence, and a utility bill with your home address on it³. Membership is free³. Once you are a member, a savings account is opened and you need to deposit at least £5.00 within the first three months to activate it³.

For a loan, members can apply online using the application form, by visiting the branch, or by contacting the credit union directly to discuss their requirements². You need to have been saving regularly for 13 weeks or three months before you can apply, and you can borrow up to double your shares³. If you already have a loan, you must have repaid at least 50% of it before applying for a top-up³.

Credit unions generally ask you to visit or call to confirm what information you need to join, because requirements vary between them⁷. If you are opening an account elsewhere, banks and building societies usually ask for an application form in branch, online or by phone, plus proof of identity including your full name, date of birth and address²⁵. Our step-by-step guide to everyday money tasks covers opening accounts and switching in more detail.

How your savings are protected

Savings with BAG Credit Union are covered by the Financial Services Compensation Scheme¹. The scheme guarantees deposits up to £120,000 per eligible person, per UK authorised bank, building society or credit union¹. Credit union loans and savings are protected by the FSCS, and the scheme protects members' savings if a bank or credit union fails²⁶.

BAG Credit Union Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority⁴. Its FCA status is Authorised, effective from 2 July 2002, and its firm reference number is 213428⁴. It also appears on the Bank of England's list of UK-incorporated credit unions²⁷. Credit unions in Great Britain and Northern Ireland are regulated by the Financial Conduct Authority and the Bank of England's Prudential Regulation Authority²⁸.

Before dealing with any financial firm, it is worth checking that it is authorised by the FCA on the FCA Register²⁹. If something goes wrong with a firm that is authorised, you can take a complaint to the Financial Ombudsman Service. Our guide to consumer protection explains how the ombudsman and the compensation scheme fit together, and scams and fraud covers how to spot and report a firm that is not what it claims to be³⁰.

If you are struggling with debt, free and impartial help is available from StepChange Debt Charity, which is authorised and regulated by the FCA¹⁴. Our guide to debt sets out the options.