Credit Unions are wonderful things. I am a member of my local one, which is run by people,free, in my town, for the benefit of local people. Their interest rates are much higher than banks and are paid gross. As most members are unemployed, sick and/or disabled, they get all of the interest, with no tax deductions, as happens with bank savings accounts. It is a little known fact, that banks deduct a part of interest paid for tax. It is up to the saver to fill in a form every year to stop this happening.
Should a saver, with a Credit Union, be working, it is up to the saver to declare the interest gained, at the end of each tax year, either on a self employed tax return or by letter, with proof of interest paid. Few bother. So an account becomes a mini tax haven. The union is not required, by law, to confirm the amounts of interest paid to whom.
The deposits on hand and the loan book, allow the Union to borrow any funds needed from a local High Street bank and loans may be repaid by standing order, in cash or via internet banking. Each loan is covered by a small life insurance policy in favour of the Union which the borrower pays for the term of the loan. They have all the powers that any lender has to recover any outstanding money, but normally get some sort of arrangement organised, to sort things out. They also open on Saturday mornings!!
By the way they were first started in Scotland !!!
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