Credit unions are co-operatives that are set up by and for members to benefit their community.

They mainly offer savings accounts and loans to their members, but some now offer current accounts, pre-paid cards and mortgages too. They often help those who can’t get access to ordinary bank products. This is because they’re run as not for profit.

If you’re struggling to open a current account from a high-street bank, many offer fee-free ‘basic’ bank accounts too.

To become a member of a credit union, you need to have a common bond with the other members.

For example, you might live in the same area, work for the same employer, or belong to the same church or trade union.

All credit unions will ask for proof of your identity and address before you can open an account.

If you don’t have the documents they need, ask them what alternatives they’ll accept.

What a credit union current account offers you will depend on which credit union you use.

Here’s what you can do with most credit unions’ current accounts:

• Pay cheques in for free.
• Get budgeting advice and support.
• pay money in over the counter at the credit union
• Pay cheques in for free, as long as the amount is in British pounds sterling.
• Have wages, salary, benefits, pensions and tax credits paid straight into your account.
• Get money out over the counter or from some cashpoint machines.
• Check your account balance over the counter or from some cashpoint machines.

And with some credit union current accounts, you can also:

• pay your bills by Direct Debit or standing order
• pay for things using a pre-paid card or a debit card
• have separate ‘jars’ in your account to help you budget for different types of spending.

Whichever credit union you use, there’s no minimum monthly amount you have to pay into your current account.

You also won’t need to pass a credit check to get an account. This is because credit unions don’t usually offer overdrafts.

If you need to borrow money, you can apply to the credit union for a loan.

They would look at your income, savings and past history before making a decision. (See ‘Other accounts and services’ below).

Credit unions sometimes charge an administration fee on current accounts, especially if they offer help with budgeting. But some don’t charge at all. Check with your local credit union before you decide.

Some social housing landlords and councils have been working with credit unions to offer tenants current accounts with lower fees.

If your landlord is one of them, you might find they’ll pay the administration fee for you.

If the account allows you to set up Direct Debits and standing orders to pay bills, you need to check whether you’ll be charged for refused Direct Debits.

It’s worth checking the savings rates offered by your local credit union – you might find they beat those offered by high street banks and building societies.

When you’re a member and have been saving with the credit union for a certain period of time, you can apply for a loan.

Credit unions try to make sure they only let their members take out loans they’re able to pay back. They do this by assessing your income and looking at how much you’ve been able to save.

There’s a cap on the amount of interest they can charge on their loans. This is 3% a month in Great Britain and 1% a month in Northern Ireland.

Credit unions are regulated by the Financial Conduct Authority. This means they have to meet certain standards.

If you’re unhappy with the service you’ve received from a credit union, raise the issue with them first.

If the credit union doesn’t resolve your complaint, you can then take it to the Financial Ombudsman Service.

All money saved in a credit union is protected by the Financial Services Compensation Scheme (FSCS) up to the value of £85,000 per person. This is the same level of protection as savings in a bank or building society.