As interest rates continue to tumble, hard-pressed savers should consider putting some of their savings in the credit union. At the moment, the credit unions are offering some of the best rate of returns on funds compared with deposits at other financial institutions.

On average, the Irish League of Credit Unions says savers can earn a dividend of between 4 and 7 per cent in a credit union account. The precise rate of interest varies across individual credit unions so it might be worth shopping around. The other bonus is that unlike at banks and building societies, these rates apply to your savings regardless of the amount held in your account and gains are not subject to DIRT tax.

These rates are falling and will be lowered in the coming months, but will still remain attractive compared with the historically low rates available at banks and building societies.

Saving with the credit union also gives you borrowing power, with members typically able to borrow 2.5 times their savings. But the downside is that its borrowing rates are also high by industry standards. The League says borrowers are charged a rate of interest of between 9 per cent and 12 per cent on loans, with keener rates available at the other institutions.

It is, however, currently reviewing these rates and some credit unions have already begun to lower them. In some cases, instead of lowering its interest rates, credit unions are offering borrowers rebates ranging from between 7.5 per cent and 15 per cent on the total interest paid over the period of the loan.

Borrowers also automatically get loan protection with a Credit Union loan at no additional cost and do not incur fees when repaying a loan ahead of schedule.