Dot ComUnity Credit Union

A question about : Dot ComUnity Credit Union

Hello,

Has anyone had any experience / issues with the above credit union? - Link: https://www.dotcu.org.uk/creditunion/savings/isa.html

I am thinking about joining the above credit union and transferring my cash ISA to it. 3% PA, no fixed term and with ISA transfer to it available, for Ј30 a year membership. It just seems too good to be true. Am I missing something here?

The way I read it - it beats just about any instant access cash ISA listed on MSE, as well as other fixed term ISA's. As I stated above, I must be missing something in order for it not to be listed as one of the 'best available' cash ISA on MSE front page.

Can anyone advise / state if I'm missing something here?

Thanks

MT

Edit: I have just noticed that there is a 90 days withdrawal notice. But it still seems pretty good. Anything else?

Best answers:

• Could be a good deal for those who are happy to do postal access only and don't mind to pay Ј30 membership fee, which is an annual fee.
  Of course the Ј30 comes straight off the interest you can earn, so the lower your balance, the more severe the impact on the effective interest rate.
  For example, if you have Ј10K, your interest is Ј300. Take the Ј30 off and you are only left with Ј270. I.e. Effective interest rate is 2.7%.
  If your balance is only Ј1K, your effective interest rate is zero after taking the membership fee into account.
  If your balance is Ј100K, your effective interest rate would be 2.97%. Though it is questionable whether a small credit union could cope with such a big balance from a single saver.
  It also is a fixed term deal - any withdrawals before maturity are subject to 90 days loss of interest.
• Many thanks for your analysis on this Innovate.
  I have around Ј40k to transfer after April 6, and possibly Ј49K by July, if I can muster up the additional 9k by then. This should make my Ј30 annual membership fee worth it. I shouldn't have a need to withdraw from this account either, as I haven't withdrawn from my ISA in the last 5 years and I have additional reserves in other accounts if required. So this does seem ideal in my case.
  I am just concerned (and surprised) why this credit union has no mention of it on this site, or on any other comparison site for that matter. As you mention it seems to be a good deal, especially for those who have transfers of more than Ј10k and can fix for a year. My concern is because I have never been with a credit union before, so I unsure about their reputation. I suppose they can't be any worse than banks.
  Thanks again.
• You have FSCS protection, unless the site is fake - best to check against the FCA website. If you think it's kosher, move fast since anything that's been mentioned on MSE can be very shortlived. Small companies can't usually sustain an onslaught by MSE.
• Thanks cookie2508 for the information. The DotComUnity ISA does indeed appear to be market leading by quite a considerable margin. I have a few questions which I'm hoping you can answer please:-
  1) Is membership (and the ISA account) really available to everyone?
  2) Do you offer any form of online banking in order to check balance etc?
  3) Is the rate on the ISA fixed at 3% for 12 months, or is the rate variable?
  4) Do you need to open and fund a share account as well as becoming a member of the Credit Union?
  5) I notice that transfers-in of previous years ISA allowances is allowed, is there any limt on this amount?
  Appologies for all the questions - this account does interest me, but I can't help thinking of the old saying.... If something sounds too good to be true...
  Many thanks.
• 3% is good for a Regular Saver ISA but it isn't the best interest rate you can get. They have also already pulled their transfer form. Their transfer in was a major differentiator but that appears gone now.
• I am pretty sure the reason why they want you to contact them about transfers is so that they can make a decision whether they actually want to / can afford to take you on. They might be quite happy to let you transfer a few K in, but they'd soon run out of steam if they get a few big hitters with tens of K, or massive numbers of smaller balances.
  I haven't applied and won't since my ISAs will all be S&S this year, incl transfers of some maturing cash ISAs.
  As to better rates than dotcommunity - one that I remember is the Nottingham Reg Sav at 4%. Also, the Nationwide one at 2.5% looks a better deal since you could save up a lot of your money (at least Ј9K) in current accounts with way better interest and then fill up the ISA with a lump sum next March. The saving up in current accounts would most likely work with lots of instant access ISAs that allow you to put a lump sum in next March. The interest rate of the ISA for 2014-15 then becomes almost irrelevant since the only reason you would want the 2014-15 ISA would be to use up your allowance. You would probably look to transferring your ISA elsewhere for 2015-16 anyway. Though anything about 2015-16 is all a bit crystal ball stuff right now
• I might be wrong but it seems they haven't got any statement on their website about the Ј15K limit. Might not be an issue for everybody but worth checking if you actually want to max your allowance.
• The registration of this company may have expired. Their registered number on their website ( 9213820 ) seems to be no longer valid.
  https://www.fsa.gov.uk/register/firm...LOlQzNp65In0__
• An interesting point DesG pointed out above (which I over read previously). There are also a few other questions which I have emailed across to Dot Comunity for clarification (creditunion@dotcu.org.uk), which I am hoping to get a response from soon (before I pay my membership). It would be good if Cookie2508 can also answer these questions on this board to clarify.
  1. To clarify if there are any limits on the amounts that can be transfered from another ISA provider into these ISA accounts. And if additional subscriptions can be made when new ISA regulations come into force in July.
  -- (Innovate's point. My opinion; I have never heard about this, and I personally don't think this should be an issue. If Dot Comunity state that they accept transfers in from other providers, then they should honour it if someone has opted to transfer the full amount, even if that amount should be Ј100K+. But there again, since I have never been with a credit union, and Innovate's point may be valid).
  2. If they can provide me with their ISA transfer request form, since it is not available to download from their site.
  -- (Despite not paying for the membership yet).
  3. Whether the interest earned can be paid straight back into the ISA account I hold with them, rather than in any other accounts.
  --(DesG's point)
  MT
• If your ISA provider goes tits up, FSCS will give you a certificate for your tax exemption, alongside the money. You can then choose a new provider. When it happened with ICESAVE, the FSCS had made arrangements with some banks who were expecting people to ask for it. There was no guarantee for uninterrupted payment of interest - if I remember correctly, interest was paid up to the default date only. It then took a few weeks for the money to get paid.
• Well I've got all the forms here signed and ready to go.... hovever I just haven't got the courage to put them in the post yet!
  I think I'm nervous as I've never had dealings with a credit union before, and I'm not sure how easy it will be to deal with them if things go wrong - were talking quite an amount on money here!
  Also it concerns me how the account description and Ts&Cs are so vague that we're having to e-mail for clarification. I'd be far happier if the conditions specifically stated how interest would be paid etc.
  Also even though the chap at the end of the e-mail has been very friendly, there are spelling and grammar mistakes all over their website (even in the PDF's), which doesn't exactly inspire me with confidence.
  At the moment I'm thinking maybe stick with what I know at Virgin Money even though it means considerably less interest :-(