Understanding Dividends – How Credit Union Ownership Pays off
When you join a credit union, you’re not just another customer, you’re a member-owner. This fundamental difference from traditional banks creates a unique financial relationship that directly helps you through dividends. But what exactly are dividends and how do they work?
Unlike banks that pay their profits to outside stockholders, credit unions return their profits to members through many avenues, including higher dividend rates on savings accounts, lower interest rates on loans, reduced (or eliminated) fees on services, and special member perks and programs.
But what ARE they?
Essentially, dividends are your share of the credit union’s profits. The more financially successful your credit union is, the more potential returns for members. These dividends can come in several forms, such as regular share savings account and certificate account dividends, special year-end bonuses, and loan interest rebates. To make the most of your membership, consider these strategies:
- Maintain higher balances in dividend-bearing accounts
- Take advantage of special certificate rates
- Use multiple services to increase your overall benefit
- And pay attention to account compounding frequency
The Bigger Picture: Community Impact
When your local credit unions succeed, your community benefits as well. Your participation as a member-owner helps to support local economic growth, provide affordable financial services to your neighbors, keep money circulating in your community, and fund programs and initiatives we value.
Getting involved
As a member-owner, we encourage you to regularly review the dividend rates and special offers (certificate specials, discounts, and more), attend the annual meeting or subscribe to our newsletter, provide feedback on how we can improve our services, and consider serving on our volunteer board of directors or supervisory committee.
The Bottom Line
Credit Union dividends are more than just earning interest – they are your share in a cooperative financial institution that puts members first. By understanding and actively taking part in your credit union, you can maximize both your financial returns and your impact on the community.
Ready to learn more about your opportunities? Schedule your free financial counsellor appointment on our website or right here and find out what products we offer would be a good fit for you and your situation.
