Crossmaglen Credit Union

Crossmaglen Credit Union is a community credit union: a member-owned savings and loan co-operative for people who live or work in Crossmaglen or the surrounding area. Members save in what the movement calls shares, and those savings are pooled into a common fund that is lent out to other members. It is not a bank, and it does not have shareholders taking a profit out of it.

Crossmaglen Credit Union is a local credit union for people living or working in Crossmaglen and the surrounding area, and it appears on the Financial Conduct Authority Register with the status Authorised, under firm reference number 573786¹. Its registered permission covers accepting deposits¹. Savings held with it are covered by the Financial Services Compensation Scheme, the same protection that covers money in a bank or building society³.

Joining starts with the common bond, the rule that decides who is eligible. For Crossmaglen Credit Union that means living or working in Crossmaglen or the wider area, and you need two forms of identification to open an account⁴. A minimum of £1 opens an account and keeps it active⁴.

What Crossmaglen Credit Union offers its members

The core of what any credit union does is take in members' savings and lend them back out to other members who need to borrow. Members' savings are used to fund loans to other credit-worthy members of the credit union, which is why the two products are really one system rather than two separate ones⁶. All credit unions offer savings and loans, and the larger ones add services such as Christmas savings accounts, prepaid debit cards, cash ISAs and, in some cases, mortgages⁷.

Crossmaglen Credit Union's own site sets out its savings and loan products, and its savings FAQs explain how shares and dividends work⁵. Alongside the core accounts, credit unions commonly offer free insurance benefits attached to savings and loans, such as loan protection insurance and life savings insurance, which pay out on the death of a member and are provided at no direct cost to eligible members⁸. Where a credit union offers insurance of that kind, the cover is arranged through an insurer rather than underwritten by the credit union itself, so the terms come from the insurer.

For a wider picture of what the sector offers, including current accounts at some credit unions, see the credit unions guide. If you are weighing up a credit union current account against a bank account, the current accounts guide sets out how the two compare.

Saving with Crossmaglen Credit Union: how shares work

Savings in a credit union are not deposits in the ordinary sense. They are shares, and holding them makes you a part-owner of the credit union rather than just a customer. Each £1 of savings in a credit union equals a share in it, and the more shares you hold the greater the dividend paid back to members at the end of each year⁵. Your savings are your shares, and they are the basis on which your eligibility for loans is calculated⁵.

That has two practical consequences. The first is that your savings are tied to your membership: they are the record of your stake in the organisation, and the amount you hold affects what you can borrow. The second is that the return on them is not interest in the usual sense. Instead of paying interest to savers and keeping the rest, a credit union shares its profit evenly among savings accounts as a dividend, with some retained to improve services⁸.

The amount of your dividend depends on the amount of shares you have saved and the surplus income available for distribution to members⁵. Every share you hold for the year is eligible for a dividend when one is declared⁵.

How the annual dividend on shares works

A dividend is the credit union's version of a savings interest payment, but it behaves differently. Credit unions normally pay a dividend once a year, and the amount you get depends on how much you have saved and how much profit the credit union has made⁹. It is paid out of surplus, so it is not a fixed rate and it is not guaranteed.

The timing usually follows the credit union's financial year and its annual general meeting, at which members vote on the accounts. Dividends are paid on savings held during the credit union's financial year, gross of tax, subject to surplus¹⁰. Because members are the owners, the decision on whether and how much to pay is taken collectively rather than set by a board answerable to outside shareholders.

Loans from the members' common fund

Loans are the other half of the model. Members' savings form a common fund, and that fund is available for providing loans to members¹¹. Only members are eligible to receive loans, so joining comes first¹¹. Some credit unions will lend to you as soon as you become a member, while others ask you to save for a set period first; either way, affordability is checked against the money you have left after paying your bills⁸.

As a rough guide, members can usually borrow at least two or three times the amount they have in savings, depending on the credit union's own loan policy¹². That link between savings and borrowing is the feature that distinguishes credit union lending from a bank loan: your track record as a saver is part of what makes you eligible.

If you join a credit union and start saving with them, you will also be able to apply to borrow money once you have proved you are a reliable saver⁹. Credit unions may also offer small, interest-free loans to members in some cases¹⁴. For how credit union borrowing compares with other options, the loans guide and the debt guide cover the alternatives, and free debt advice charities can help if you are already struggling with repayments.

Who can join: the Crossmaglen common bond

Every credit union in the UK may only accept members who share a common bond, and that bond is what decides who is eligible¹⁵. A common bond can be based on living or working in the same area, working for the same employer, or belonging to the same association such as a trade union or church⁸. Crossmaglen Credit Union has a community common bond, which means all members live or work in Crossmaglen or within the surrounding area¹¹.

If you are not sure whether you fall inside the area, the test is your address or your workplace rather than any family connection. There is one common exception worth knowing: as long as one member of a family meets the common bond requirements and has joined the credit union, other family members living at the same address can usually join too⁸. That means a household can often join together even if only one person lives or works in the qualifying area.

To become a credit union member you need to visit or call your chosen credit union to confirm what information you need to join, because the practical requirements vary between credit unions⁷. Most local areas have a credit union, so if Crossmaglen's bond does not cover you, there is likely to be another one that does¹⁶.

Identification you need to join

Crossmaglen Credit Union asks for two forms of identification, one from each of its sections: a photographic document and a document proving your address⁴. The photographic section accepts a current valid passport, a current valid driving licence, a current valid Electoral Identity Card or an EU Member State Identity Card⁴.

Across the sector, credit unions typically ask for two recent documents to prove your identity and address, and the documents commonly accepted include a passport, driving licence, student or work ID card, bus pass, birth certificate, bank statement or energy bill¹⁷. Some credit unions are specific about what counts: a photographic document must show your date of birth and a recent photo, and a driving licence can sometimes serve as either the photo document or the address document, but not both at once¹⁷.

If you are opening an account after leaving a situation where someone else controlled your post or your money, there is separate guidance on opening a new bank account safely¹⁸.

How to open an account with Crossmaglen Credit Union

The process is deliberately local and personal. Start by checking that you meet the common bond, then contact the credit union to confirm what you need to bring. Crossmaglen Credit Union's own joining page sets out the steps and the identification it wants⁴.

1. Check you live or work in Crossmaglen or the surrounding area⁴.
2. Contact the credit union to confirm the current joining requirements and any appointment needed⁷.
3. Gather two forms of identification, one photographic and one proving your address⁴.
4. Complete a member application form and present your identification¹⁷.
5. Pay in at least the minimum of £1 to open the account and keep it active⁴.

Some credit unions open accounts instantly when you call into the office with your photo and address identification, and others take applications online or through mobile banking¹⁷. Once you are a member, you can usually open more than one account, so separate savings pots for different purposes are often possible¹⁹.

Keeping your account open

A credit union account is not dormant in the way a bank account can be. The minimum balance matters: Crossmaglen Credit Union states that a minimum of £1 is needed to open an account and keep it activated⁴. Keeping a small balance in shares maintains your membership and your eligibility to borrow.

Membership also brings rights that ordinary customers do not have. Credit unions run on one member one vote, regardless of how much you have saved, and members elect the board at the annual general meeting⁸. That is why the dividend decision is taken collectively, and why the annual general meeting matters to the amount you receive.

If your circumstances change, for example if you move out of the area, it is worth asking the credit union directly how that affects your membership, because the common bond is the basis on which you were accepted¹⁵. Credit unions are regulated by the Financial Conduct Authority, and in Great Britain and Northern Ireland regulation is undertaken by the FCA together with the Bank of England's Prudential Regulation Authority³.

How your savings are protected

Savings held with a credit union are protected by the Financial Services Compensation Scheme, the same scheme that covers bank and building society deposits³. That protection applies to shares as well as to ordinary savings, and it covers loans and savings together³. If the credit union were to fail, eligible members would be able to claim through the scheme.

The FSCS limit is a per-person, per-institution limit, so if you hold savings with more than one credit union, each one counts separately. If you hold savings in a credit union and also in a bank that shares a licence with it, the two could count together, so it is worth checking before placing large sums.

If something goes wrong with the service rather than the firm's finances, you can complain to the credit union first and then, if you are not satisfied, take the complaint to the Financial Ombudsman Service, which is free to consumers. For the wider picture of what protects you when a financial firm fails or treats you badly, see the consumer protection guide.