KRD Credit Union

KRD Credit Union is a credit union in County Londonderry, Northern Ireland, open to people who live or work within its local common bond. It takes savings, which are held as shares, and lends to members from those savings. Members can pay in and take money out online or at one of its offices, and loan applications are made in person or through the member's area¹.

The name is an abbreviation of Kilrea, Rasharkin and Dunloy, the three places the credit union was formed to serve. The FCA Register lists Kilrea, Rasharkin & Dunloy as a previous name². Its website is krdcreditunion.com².

What it offers is the standard credit union package: a savings account held as shares, personal loans, and insurance benefits attached to both at no direct cost to the member. Savings are capped at a maximum balance, subject to change, and the return on them is a dividend rather than interest¹.

What KRD Credit Union offers its members

Credit unions provide loans, savings, bank accounts and other services to their members, and all of them offer savings and loans as a minimum⁵. KRD follows that model. Its members hold a savings account, can borrow against their record of saving, and get insurance benefits attached to savings and loans at no direct cost.

Beyond the core two products, credit unions in the UK vary in what they add. Many offer junior savings accounts, Christmas savings accounts, prepaid debit cards, insurance products, cash ISAs and in some cases mortgages⁶. Some also offer electrical and household goods that members pay for in weekly instalments, which can work out cheaper than high street prices⁷. KRD's own site sets out savings, secured loans and insurance, and the office can confirm what else is available to members locally.

The wider credit union sector in Wales and Northern Ireland is supported by government programmes that promote saving and borrowing through credit unions, which is one reason the model is more visible in Northern Ireland than in much of England⁸.

If you are weighing up whether a credit union suits you at all, the credit unions guide explains the common bond, the share model and how credit unions differ from banks. For the savings side generally, see savings accounts; for borrowing, see loans.

Savings as shares: how a KRD account works

Money you pay into a credit union is not a deposit in the ordinary sense. It buys shares, and each £1 of savings at KRD is equivalent to one share in the credit union¹. That is why credit union savings are described as a share account: each member owns a share of the credit union itself⁹. Savings in a credit union are called shares precisely because every member is also a shareholder and owner⁴.

The practical effect is that you are a member-owner, not a customer. You get a vote at the annual general meeting, and the credit union's surplus is shared among savings accounts as a dividend rather than paid out to outside shareholders⁴.

Paying in is usually flexible. Credit unions commonly accept standing orders, payroll deductions, child benefit paid directly into the account, and payments made in a branch¹⁰. KRD members can pay in online or at one of its offices¹. If you are used to a bank current account, the current accounts guide sets out how the two compare.

How the dividend on savings is decided

KRD does not pay interest on savings. Instead it pays a dividend, and the amount depends on how the credit union performed during the financial year, the value of the shares in your account and how long they were there¹. The dividend percentage is recommended by the board of directors at the year end, after the accounts are audited, and then voted on by members at the annual general meeting¹.

That sequence matters. A dividend is not a contractual rate you can rely on. It is a distribution of surplus, and it depends on the year's results. Credit unions normally pay a dividend once a year, and the amount depends on how much you have saved and how much profit the credit union made¹¹. Where a credit union pays one, it is usually paid annually⁴.

Different credit unions calculate it differently. One applies the declared rate to the lowest balance of each savings account in each month of the year¹². Another calculates it daily across the previous financial year¹². Some pay a dividend into your account as a percentage of your savings once the annual accounts are approved, and only if there is sufficient profit after setting aside the required reserves¹³. A credit union may also choose to pay a loan interest rebate, which refunds loan interest to members who borrowed during the preceding financial year⁴.

The honest summary is that in a good year you may receive a dividend, and in a poor year you may receive nothing. That is the trade-off for a member-owned structure.

Loans secured against your shares

KRD offers personal loans at preferential rates when they are secured by shares¹. A secured loan of this kind is covered by the amount of regular shares you hold¹⁴, and the amount of shares up to the value of the loan is held as collateral¹⁵. Any amount you apply for that falls at or below your share balance is treated as secured¹⁵.

The advantage is that the credit union already holds the security, so the loan is cheaper than an unsecured one. The disadvantage is that the shares used as security are not available to you until the loan is repaid. Where a loan is fully secured, shares up to the value of the loan are attached, so only the share balance above the outstanding loan is free¹.

KRD also offers a secured loan product for members who want a reduced interest rate, with applications completed through the app or online and supporting documents uploaded the same way¹⁶. The credit union's own pages carry the current terms and rates.

Credit unions generally let members borrow at least two or three times the amount they hold in savings, depending on the credit union's loan policy¹⁷. That is a useful benchmark when you are working out what you might be able to borrow, but the actual figure is set by KRD.

Life savings insurance at no cost to members

KRD offers access to Life Savings Insurance on a free-to-member basis, subject to terms and conditions¹. The cover applies to member savings lodged before the age of 70, while the member is in good health, up to a maximum insurable benefit³. It is provided by the credit union at no cost to the member³.

KRD also provides Death Benefit Insurance to eligible members free of charge³, and Loan Protection Insurance on loans, again at no cost to the member³. The pattern is common across the movement: credit unions offer life insurance on savings and loan protection insurance on loans to members who qualify, at no additional cost¹⁹.

The insurance is arranged by the credit union rather than underwritten by it, so the cover sits with an insurer behind the scheme. The office can tell you which insurer provides it and give you the policy terms.

Fees and charges

KRD states that it has no hidden fees or charges¹. That is a common position among credit unions: loans are described as having straightforward terms and conditions with no hidden fees or charges¹⁴, and some credit unions state there are no hidden charges or fees on any transactions²⁰.

Where credit unions do charge, it is usually a small one-off joining cost rather than an ongoing fee. Another states that membership is free²¹. KRD's own site is the place to check its current position, since joining costs and any charges can change.

The important point for a reader comparing options is that credit union pricing is not built on the fee structures common in high street banking. There is no monthly account fee, no overdraft charge and no arrangement fee in the usual sense. What you pay for a loan is interest, and what you receive on savings is a dividend.

Withdrawing savings: when your money is tied up

KRD says you can withdraw your savings at any time online or in one of its offices, but shares pledged as security against a loan are not instantly available¹. That single sentence contains the whole rule, and it is the one members most often trip over.

The same condition appears across the movement. Members can withdraw savings provided they are not pledged as security for a loan¹⁷. Savings balances over and above any loan are available to withdraw on demand²³. Where a credit union holds attached savings as a condition of a loan, and those attached savings are more than the loan balance, the excess can be withdrawn²⁴. Some credit unions go further and do not allow withdrawals at all while a member has a loan²⁵.

The practical test is simple arithmetic. Take your share balance, subtract the amount you still owe, and the remainder is what you can access. If your attached savings are more than your loan balance, you will be able to withdraw those shares; if they are not, nothing is free until the loan comes down¹.

Banking with KRD online and at its offices

KRD members can withdraw savings online or at one of the credit union's offices¹. Loan applications are made in person at the office or online in the member's area²⁷. The secured loan product is applied for through the app or online, with supporting documents uploaded the same way¹⁶.

Credit unions in the UK vary widely in how they deliver services. Some offer online and phone banking, a payroll partnership with your employer, a local branch or service point you can walk into, or a combination of all three⁹. Online member areas typically let you check your balance and recent transactions, request statements, and apply for or access personal loan facilities²⁸.

If you are not already a member and want to know whether you are inside KRD's common bond, the office is the quickest route. The Find Your Credit Union tool can also locate credit unions by area if KRD turns out not to cover where you live⁶. The Association of British Credit Unions runs a search and a phone line on 0800 015 3060⁹.

How savings at KRD Credit Union are protected

Savings held with a credit union are protected by the Financial Services Compensation Scheme, the same scheme that covers money in banks and building societies⁴. All shares, meaning savings, in an affiliated credit union are eligible for protection under the scheme⁴. Credit union savings are covered up to a total of £120,000 per person per firm¹⁰.

That limit is per person, per firm, not per account. If you hold savings in more than one credit union, each one carries its own limit. If you hold savings in a credit union and also in a bank, the two are separate firms for this purpose.

KRD Credit Union Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, with firm reference number 574095, and it appears on the Bank of England's list of UK-incorporated credit unions². You can check the firm's entry yourself on the FCA Register before you join².

If something goes wrong with a credit union and you cannot resolve it with the firm, the Financial Ombudsman Service can look at complaints about the firms it covers. Free, impartial help on money problems is available from MoneyHelper, and free debt advice from charities including StepChange. The consumer protection guide explains how the ombudsman and the compensation scheme fit together, and the debt guide sets out what to do if you are struggling with repayments.