Credit Union or Bank for saving?

adocholiday

Hi all,

My OH and I are hoping to get married in 2 years and are starting a wedding fund. Up to now neither of us have made any savings because we weren't in a financial position to so, but now I'm looking at various options and I'm a bit clueless. We hope that we recoup some of this wedding fund money through gifts etc. at the time of the wedding and put whatever we get back towards a mortgage.

A few people that I've asked have said that the Credit Union is the best option because they have better interest rates and will give you up to 3x your balance for a loan if you need it. Another person said that if we're intending on getting a mortgage we should start saving with a bank. My own research has left me none the wiser so I would really appreciate some opinions from people with more knowledge of the area.

Many thanks!

phormium

I would definitely go with Credit Union if you feel there is any chance you will need to borrow towards the wedding. Other than that look at the interest rates but you are not going to make much interest anyway. For a mortgage a bank will look for your savings record, it won't really matter who that record is with once you have relevant statements.

adocholiday

phormium wrote: »

I would definitely go with Credit Union if you feel there is any chance you will need to borrow towards the wedding. Other than that look at the interest rates but you are not going to make much interest anyway. For a mortgage a bank will look for your savings record, it won't really matter who that record is with once you have relevant statements.

Thanks for that. Ok to ask a more general question then - at what point, if ever, is it better to save with a bank over a credit union? I'm quite ashamed to say that I have absolutely no knowledge of these things!

Rob Thomas

If you are going to be looking for a mortgage in the future, then building up a savings record with your Bank is helpful. In past times it would have been preferred as some of the more established Irish Banks preferred to lend to their own customers first and there were better rates on offer on a one off basis for some.

But this is historic at this stage and rates are pitiful whereever you go with DIRT taking a chunk of any interest you get too. You should research where you get the best interest rate on your savings and go that way if thats important to you. If you go for a mortgage the Bank will want to see a savings record, as long as you have statements to back that up, you will be fine. And you will most likely go with the Bank that offers the best deal on a mortgage anyway so that may not even be your current Bank.

Its true that your Credit Union will be more open to a wedding loan than your Bank if it comes to that. Personally, I think its generally a good rule to develop a relationship with your CU at some level at least. You never know when you might need them.

phormium

It is a long time since banks cared where you saved, preference to customers is long gone and an existing relationship with a bank doesn't even matter anymore. Once upon a time it helped to know the bank manager and they know you and your financial affairs, nowadays bank managers have no say one or the other anyway, computer & head office decide everything.

Agree with above poster, if purely for savings return then I would go with the highest rate which will probably be some bank, if for ease of small borrowing then I would go with CU.

Just to add a few words to this, firstly I recommend you go into your CU and ask them have they done wedding loans, do they want your business, and give them an estimate of say, €15k or €20k that you might need to borrow down the line. Watch the reaction. Some will bite your hand off for the business & others will be less inclined for various reasons. They should be able to tell you exactly what they will do for you if you save €x per week or month.

Secondly, when it comes to getting a mortgage, its v possible;e that your CU will give you the 10% you need, but be aware that some mortgage lenders do not want to see ANY loan outstanding before they give an offer letter, and a CU loan will be very visible on your Credit Rating.

adocholiday

George Bernard wrote: »

Just to add a few words to this, firstly I recommend you go into your CU and ask them have they done wedding loans, do they want your business, and give them an estimate of say, €15k or €20k that you might need to borrow down the line. Watch the reaction. Some will bite your hand off for the business & others will be less inclined for various reasons. They should be able to tell you exactly what they will do for you if you save €x per week or month.

Secondly, when it comes to getting a mortgage, its v possible;e that your CU will give you the 10% you need, but be aware that some mortgage lenders do not want to see ANY loan outstanding before they give an offer letter, and a CU loan will be very visible on your Credit Rating.

Thanks for that I'll have that conversation with them so. We're intending on putting away about €1000 per month so hopefully we won't need to borrow anything and if we do it will be a very small loan. I also don't intend on borrowing the deposit for a house, but thanks for that all the same it's good to know