People will soon be able to open a basic bank account through a credit union rather than going to a high-street bank.
Credit unions are co-operatives designed to offer access to financial services to their members.
With increasing numbers of employers requiring bank accounts and benefits being paid directly – as well as charges being applied for paying in cash rather than by direct debit – the Association of British Credit Unions Limited (Abcul) has said its members will begin offering consumers basic bank accounts.
From this weekend Britons will be able to invest in basic bank accounts provided by credit unions.
They are designed to provide access to people excluded from bank and building society accounts, and offer debit cards that can be used in shops and to withdraw money from cash machines.
There are no cheque books or overdrafts with the credit union current accounts, but account holders will be able to set up standing orders and direct debits giving them much greater control over their finances.
“We can offer members a current account service similar to that offered by banks, but with all the added extras associated with a financial co-operative that is owned and run by its members, for the benefit of those members,” said Mark Lyonette, Abcul chief executive.
“Offering credit union members access to banking services in this way represents a major step forward in helping to meet the government’s aim of eliminating financial exclusion.”
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