Credit union proposals 'are interesting'

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Credit union proposals 'are interesting'

Mon 16th Jan 2012

Changes to the way credit unions operate could make them an interesting saving tool in the years to come, it has been claimed.

Elaine Moore from FT Money said the government has ruled that rather than paying out dividends at the end of the year based on the profits they receive, credit unions can actually set a rate of interest at the start of the year.

She noted: "This puts them on a level playing field with banks and building societies and other lenders out there."

One drawback to the new system however, could lie in the fact that in order to invest in credit unions, individuals have to have some form of connection. For example, only members of the police force can invest in the police credit union and only Glasgow residents can invest in the Glasgow credit union.

The news follows comments from David Kuo, director at financial website The Motley Fool,  who recently claimed alternative investments can be a good addition to an individual's retirement savings portfolio, but only if people know what they are doing.

Indeed, he argued high-risk investors may consider them to add diversity, balance and possibly some fun to their existing portfolios.

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