By early summer, credit union customers will be able to avail of further services introduced under the Credit Union Act which came into force in October.

Long-term savings plans will become available with higher yields than standard credit union deposit accounts.

Other services being introduced under the legislation include education savings plans and longer-term loans, some with terms of more than 10 years.

While the credit unions are not revealing specific details of the new services, they will be similar to those offered by the commercial banks.

The Irish League of Credit Unions (ILCU) says there has been a demand from members in recent years for new services, particularly long-term deposit accounts with yields rivalling the banks.

The legislation raised the general limit on loans from £20,000 to £30,000 and also provided for bigger loans subject to certain criteria.

A credit union can now make an individual loan of up to 1.5 per cent of its total assets and up to 5 per cent of a credit union's total loan book can be made up of loans of more than £30,000.

This means that the biggest credit unions can make individual loans of more than £900,000. The two largest credit unions have total assets of £65.5 million and £63 million respectively.

However, the total amount of funds they can advance in loans of more than £30,000 each is restricted to about £3 million - the aggregate amount of all loans of more than £30,000 cannot exceed 5 per cent of their total lending. That means they can advance just 100 loans of £30,000.

But there is some flexibility in the system. The limits can be changed at any time by Ministerial Order and the Registrar of Friendly Societies can waive the 5 per cent limit at the request of an individual credit union.

This has been built in to help some of the larger credit unions, mainly based in Dublin, who claim the limits act as a major restriction.

The ILCU wanted its member institutions to be able to make loans up to 5 per cent of total assets.

The credit unions offer loans at a fixed rate of a maximum 1 per cent per month on a reducing balance.

Similar arrangements are offered by other financial institutions, but without the attractive loan protection terms provided by the credit unions, where if a borrower, aged up to 55, dies their life savings are doubled and any loans wiped out.

On shares and deposits the Act raised the £6,000 limit on shares and deposit accounts to an aggregate figure of £50,000.

However, there is a proviso that no more than £20,000 can be held in the form of deposits, based on the fear that "hot money" is more likely to be put on deposit rather than in shares.

There is some flexibility here too in that in some circumstances a member can hold up to £30,000 on deposit - to cater for cases where members get redundancy or inheritance sums for example.

But the number of members exceeding the £50,000 limit cannot be greater than 1 per cent of the credit unions members.

One of the great advantages of a credit union account is there are no transaction charges and interest on deposits is not liable for DIRT.

Deposits are liable for tax, but the Revenue Commissioners leave it to members to declare voluntarily what they have received - but only if the deposit interest is greater than £500.

The last few months have also seen credit union branches offering other services for the first time.

Among these are insurance schemes, ATM accounts, bill payments and direct payment of salary. All this is bringing them into competition with other financial institutions.

The latest service on offer from credit unions is re-payment protection insurance (RPI).

The scheme covers people for accidents or sickness during the term of their loan.

It also provides 12 months maximum cover in the event of redundancy and critical illness cover which pays off the outstanding balance of the loan for members who are self-employed or State employees.

The cost of the RPI insurance is £6.41 extra per month on a standard £3,000 loan discharged over 24 months.

Credit unions are already offering motor, travel and home insurance.