Frequently Asked Questions
What is a credit union?
A credit union is a financial co-operative owned and run by its members
Simply put-
- It provides a savings and loan service
- It is not for profit
- It is member owned and controlled
How does it work?
All our members save on a regular basis. These funds are then pooled and used to lend to those members wishing to borrow.
What do you mean by ‘member owned’?
Once you open your savings account you become a member of Grampian Credit Union. This effectively means you become part owner of the organisation, have the right to attend our AGM and influence the running and policies of the organisation.
What do you mean by ‘Not for profit’?
As an ethical and mutual organisation, making profit is not our primary aim. All money that is made (minus costs of running the business) is given back to our members in the form of dividend on their savings. Grampian Credit Union, like all credit unions, is registered as a ‘Not for Profit’ organisation.
Why Join?
Most people feel they should be saving a little bit more, but find that they don’t quite get round to it, or have spent all their money before they have time to put anything aside.
At Grampian Credit Union, your savings can be automated, through payroll deduction (if your employer is set up for this) or standing order, so that the amount you choose goes straight into your account when you get paid.
A lot of members find that they don’t miss the money they save, and remembering to save it is no longer an issue, as your savings build up in the background while you get on with life.
Whether or not you plan to borrow, having this option could be valuable to you.
While some companies advertise lower rates, quite often this only applies to bigger loans, and the interest is charged on the whole loan amount, even if you have repaid most of it. Interest with a credit union is charged at no more than 2% per month and is paid on the outstanding loan balance, so if you decided to pay a bit extra, you would pay less interest.
There aren’t any hidden extras either, such as set-up fees, early repayment penalties, or over-priced compulsory payment insurance, which are common ways of making up for profits lost through lower interest rates. All of this makes it cheaper to borrow than with a lot of lenders – particularly for smaller amounts.
Because the interest on credit union loans is fixed by law, you can take the same loan every year at the same cost. This makes it ideal to budget for regular expenses. For example, you could take a loan to pay your car insurance for the year, and clear it within a year. Next year you could repeat the same loan - if you are charged an admin fee to pay your insurance monthly, you may find that the interest on your loan is less than this. At the end of the loan every year, you will also have more in savings than you did the previous year, as a saving element is included in your loan repayment. There are also a range of other services to help you get the most out of your membership.
Why is a credit union loan better?
Credit union customise each loan to suit the conditions and needs of each member. Interest rates are fair and affordable, and fixed by law. Interest is calculated on the reducing loan balance, so interest payments get smaller as the loan is paid back. There is no penalty for repaying a loan early, or any hidden fees or transaction charges.
What is a common bond?
Each credit union has its own common bond – something all its members must share before they can join. For example, one credit union may only serve the people living in a certain town; another one might exist for members of a sports club.
What kind of people join GCU?
Our common bond includes a wide range of different jobs, so we have in our membership a variety of skills, experiences and backgrounds. Membership of Grampian Credit Union is not only open to employees of the following but also anyone living or working in the Grampian area.
- Aberdeenshire Council
- Grampian Fire & Rescue
- NHS
- Grampian Police
- Partnership Housing
- Moray Council Cornerstone Community Care (Grampian only)
- Middlefield Community Project
- Family (including children) living with a member
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- Aberdeen City Council
- AACS
- Grampian Drugs Action
- Aberdeen Cyrenians
- Grampian Joint Valuations and Assessors Board
- SCARF
- Aberdeen CAB
- Aberdeen Foyer
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What ARR is provided on deposits?
Rather than paying a set interest rate on savings, credit unions return any profit made to their members as an annual dividend, after covering running costs and allocating to reserves. Members can help increase the potential dividend by saving and borrowing together, as well as encouraging eligible colleagues / family members to join.
How much do I need to save?
You can save as much or as little as you like with a credit union. GCU has members saving anything between a few pounds and a few hundred pounds a month. You will get the most out of credit union membership by putting aside an amount you won miss and letting it build up over time. Read More about Savings »
Is my money safe?
All credit unions are regulated by the Financial Services Authority, which also oversees banks and building societies. Credit unions are required to make regular quarterly returns to the FSA and keep within the relevant regulations as well as having their accounts audited annually. They must also keep reserves, to protect against the impact of unpaid loans or large numbers of share withdrawals. In addition to the FSA, each credit union belongs to an umbrella body which has its own rules and oversees its member credit unions. Credit unions are also covered by the Financial Services Compensation Scheme, which would replace members savings if things went wrong, although the above procedures make this situation easier to prevent.
How do I apply for a loan?
To borrow from a credit union, you must first be a member. Go to the Membership Page or Download Loan Application (894.2kb)
What if I move away from the Grampian region?
Your joining fee (£5) buys you annual membership. You can stay a member if you move away, change jobs or retire. This, and the option to open accounts for family members (including children) mean that we have members from all walks of life.
Are there any charges?
There is a Joining fee of £5 and an annual £5 service fee.
What about my confidentiality?
Grampian Credit Union is very strict about maintaining members’ privacy. Each board and staff member must sign a pledge of secrecy that is binding for life, before they have access to any member’s information. Passwords and security questions are needed to access your account. If you want someone else to have access to your account, you will need to sign a form (available from the office). All credit unions follow the Data Protection Act 1998.
What if I have a complaint?
We hope that you will be pleased with the service you receive from Grampian Credit Union, but if for any reason you are not happy with us, please put your complaint in writing. Your complaint should be sent for attention of the Manager, marked ’Private and Confidential’. It will then be passed on to our Complaints Officer, who will look into your grievance and send you a reply.
Leaving your job?
You don’t need to leave the credit union when you change job. If you go to another common bond employer, we can set up your payroll with them—if not then your payment would come in through standing order. Simply call the office, and we will send you the right form.
Ending membership?
You can cancel your membership at any time—if you call the office we can send you any paperwork needed. If you have a loan, this will need to be cleared before you can leave—shares can be used to do this and any balance after this can be paid by cheque. Any shares owed to you will be refunded. If you pay in by standing order, you will need to stop this with your bank.
What about my family members?
When you become a member of the credit union, your partner or any other family also qualify to join. For adult family members, savings would come in through a standing order from their bank, unless they work for one of the organisations that can process payroll deductions for us. Although we don’t give joint accounts, we have a number of couples with individual accounts among our membership – this gives them the option to split loans between them if required.
We have recently introduced Junior accounts, to extend the benefits of regular saving to family members under the age of 16. These can either be used as pocket money accounts, or to save up longer term for things like weddings or university. Savings can be made by an addition to the adult family member’s payroll, standing order, or by cash deposits. For children under 12, the adult family member will be required to act as a trustee – after their 12th birthday they can make deposits or withdrawals by themselves. At their 16th birthday, the Junior account automatically becomes an adult one, although loans cannot be taken by under-18s. Junior members are not charged a membership fee, so it is worthwhile to join the little people in your life up early.
Who runs a credit union?
A voluntary Board of Directors, elected by the members at the Annual General Meeting.
What can a credit union do for me?
Your credit union can help you to keep financial control, through regular saving and fair, affordable access to loans. Membership gives you ownwership of the organisation which is taking care of your money, and the chance to help people like you. Go to the Membership Page »
How can I help my credit union?
By pulling together, we can all make Grampian Credit Union bigger and better for everyone. By becoming a member, you are already helping the credit union, as your savings add to the fund available for lending. Simply saving regularly and borrowing responsibly make an enormous difference, as can encouraging eligible family members to join.
How do I become a workplace rep?
If you work for one of the organisations listed above, you might like to help us get the word out at your workplace. You can do as little or as much as you are comfortable with – from placing a poster or spare information packs where your colleagues can see them through to telling people about the credit union. If you are aware of any team meetings or staff bulletins that we could make a contribution to, or any ideas that you think would be appropriate at your work, we would be very interested to know about them. Marketing is an area we would like to focus on, at the moment, so we are ready to put some of your ideas into practice.
How do I become a Board member?
If you have a few hours to spare each month, you could take an active role in running the credit union.
‘Being a Board member is an opportunity to take responsibility in a very supportive environment, to help develop the services to members and to drive the marketing strategy - to win more members! and to do more business in savings and loans. Becoming a Board member is a great development opportunity whatever you do in your working life and we want to hear from you’.
- Jennie Biggs, Chair
Other than time, you don’t need any special abilities, although it might help you discover some skills that you didn’t know you had, and it would be an excellent line on your CV. A variety of training is provided and the role may fit in with your employers Continual Professional Development scheme.
New board members are elected at our AGM, usually held at the beginning of the year, then the new board agree on specific roles straight afterwards. There are a number of different areas you can specialise in, including staffing, promotions, credit committee, money laundering prevention, treasury, or overseeing the running of the credit union. Not all board members take on a role, but nonetheless give a valuable input at the meetings. These take place monthly – once a new board is agreed, they will decide on the best days for all of them. Refreshments are provided at the board meetings. | 
05 September 2010
Download Membership Application Form (179.4kb)