Page last updated Sunday, 08 January 2012
Up to now Friendly Societies did not pay interest on savings, instead paying a dividend and they had to have a "common bond" which restricted its membership to certain groups.
However new rules mean that from the 8th January, such financial co-operatives can, for the first time, pay interest on savings and provide their services to a wider range of groups. The changes will enable them to compete more effectively with banks and more consumers will be able to take advantage of the style of banking Credit Unions offer.
The move comes about as a result of the commitment to promote this area of financial service and the number of Credit Unions, now running at a little over 400 with around 1 million members, is expected to increase.
Read more on How credit unions work and their key points.