Credit Union Dividend

allthedoyles

Credit union dividend is usually available in December . My local Credit Union are having AGM on 21st December .

This is very late ........................are all Credit Unions the same ?

Spocker

No, all Credit Unions are different. They individually set their own dividend (if any) and I know of at least one Credit Union in my county that is not having their AGM until the middle of January

allthedoyles

Okay then ,so some Credit Unions obviously not interested in arranging payout before Christmas , when it would be a nice bonus for some .

CINCLANTFLT

A few things...
- Just about all AGMs are running late this year... there was a back log at the CBI in approving accounts related to the new accounting standard
- CUs can choose to have their AGM in January if they want... lots do
- Dividends are going to be very low this year, even if the CU has a good surplus

The last one relates to interest rates being low or even negative in most countries. In addition most CUs have more shares (deposits) than they can lend out. Thus low dividends will discourage people saving with their CU. Expect more in the way of rebates (money back on interest paid on loans)

Quackster

CINCLANTFLT wrote: »

A few things...
- Just about all AGMs are running late this year... there was a back log at the CBI in approving accounts related to the new accounting standard
- CUs can choose to have their AGM in January if they want... lots do
- Dividends are going to be very low this year, even if the CU has a good surplus

The last one relates to interest rates being low or even negative in most countries. In addition most CUs have more shares (deposits) than they can lend out. Thus low dividends will discourage people saving with their CU. Expect more in the way of rebates (money back on interest paid on loans)

Yep, my CU (Tralee) is paying 0.25% dividend and 5% loan interest rebate.

CINCLANTFLT

Quackster wrote: »

Yep, my CU (Tralee) is paying 0.25% dividend and 5% loan interest rebate.

They're a very good CU... this is what CUs will all look like in the future...

alph

Sorry to jump on this thread for my own question but the title fits with my question I suppose.

I just had the dividends applied to my credit union savings. I got about about 0.25% which I find sort of pitiful...

I guess my question is, is there any point with saving with a credit union if you don't intend on taking out a loan ?

Should I just move my savings into some other savings account?

dennyk

I went with a credit union because I'd rather have my money benefiting the local community instead of lining the pockets of some big bank executives. Being able to withdraw on demand is also handy, even if it'll no doubt take a few days to process, since my savings is also my emergency fund. I think you'd be hard-pressed to find any bank account paying much more than that AER these days anyway, unless you're willing to tie up your savings for years in a term deposit or similar.

CINCLANTFLT

alph wrote: »

Sorry to jump on this thread for my own question but the title fits with my question I suppose.

I just had the dividends applied to my credit union savings. I got about about 0.25% which I find sort of pitiful...

I guess my question is, is there any point with saving with a credit union if you don't intend on taking out a loan ?

Should I just move my savings into some other savings account?

The hint is in the name ... credit union and not saving / investments club... I agree that 0.25% is very small, but that is what the markets are paying...
speaking of which, if you give you money to the CU and it is not lent out, then they have to invest it to make some return... Bank of Ireland are going to be charging negative interest to Credit Unions on certain accounts over certain balances from January... the day of a zero or even negative dividend could yet arrive!

hinault

CINCLANTFLT wrote: »

The hint is in the name ... credit union and not saving / investments club... I agree that 0.25% is very small, but that is what the markets are paying...
speaking of which, if you give you money to the CU and it is not lent out, then they have to invest it to make some return... Bank of Ireland are going to be charging negative interest to Credit Unions on certain accounts over certain balances from January... the day of a zero or even negative dividend could yet arrive!

It's up to individuals to decide of course, but depositors being charged for depositing money at a CU or a bank, is going from the sublime to the ridiculous.

CINCLANTFLT

hinault wrote: »

It's up to individuals to decide of course, but depositors being charged for depositing money at a CU or a bank, is going from the sublime to the ridiculous.

We live in an odd world where we are willing to pay to get our money back when we want it... a few years ago, we'd pay 100 to the bank and expect 105 back a year or two later.
Now we pay 100 and hope to get 100.05 back in a year or two...
Now the idea is going to be you pay 100 and are happy to 99.5 back in a year or two... the alternative is to take a risk and maybe get 0 back if the bank goes bust...

It may seem ridiculous, but this is where low interest rates and QE have sent us...

hinault

CINCLANTFLT wrote: »

We live in an odd world where we are willing to pay to get our money back when we want it... a few years ago, we'd pay 100 to the bank and expect 105 back a year or two later.
Now we pay 100 and hope to get 100.05 back in a year or two...
Now the idea is going to be you pay 100 and are happy to 99.5 back in a year or two... the alternative is to take a risk and maybe get 0 back if the bank goes bust...

It may seem ridiculous, but this is where low interest rates and QE have sent us...

Yes, this is one reason why the financial system will eventually cannibalise itself.

Bob Z

Yes its strange you pay to put money into a bank

What is safer a bank or credit union?

I take it that the post office is the safest

CINCLANTFLT

Bob Z wrote: »

Yes its strange you pay to put money into a bank

What is safer a bank or credit union?

I take it that the post office is the safest

Whoever pays the highest interest rate is probably the riskiest... the bigger the risk, the bigger the return you should expect...

Anyway, whether your money is in a bank or CU, your deposits are protected up to €100,000...

dennyk

CINCLANTFLT wrote: »

Whoever pays the highest interest rate is probably the riskiest... the bigger the risk, the bigger the return you should expect...

The risk-reward correlation doesn't really apply to deposit accounts; the interest paid on consumer deposits is utterly negligible compared to any banking institution's other activities. There's no greater risk putting your money in a savings account that pays 0.50% AER over one that pays 0.25% AEY; factors which cause banks to fail have nothing to do with consumer deposit account interest payments. The only thing higher deposit account interest rates usually correlate with is reduced flexibility and access to your money (long-notice accounts, term deposits, required minimum monthly deposits, etc.).

CINCLANTFLT

dennyk wrote: »

The risk-reward correlation doesn't really apply to deposit accounts; the interest paid on consumer deposits is utterly negligible compared to any banking institution's other activities. There's no greater risk putting your money in a savings account that pays 0.50% AER over one that pays 0.25% AEY; factors which cause banks to fail have nothing to do with consumer deposit account interest payments. The only thing higher deposit account interest rates usually correlate with is reduced flexibility and access to your money (long-notice accounts, term deposits, required minimum monthly deposits, etc.).

For a while after they partially failed the ECB stress tests, PTSB paid the highest deposit rates in Ireland... they had to attract deposits in a time when people were nervous to do business with them...

Geuze

alph wrote: »

Sorry to jump on this thread for my own question but the title fits with my question I suppose.

I just had the dividends applied to my credit union savings. I got about about 0.25% which I find sort of pitiful...

I guess my question is, is there any point with saving with a credit union if you don't intend on taking out a loan ?

Should I just move my savings into some other savings account?

Given that many CU simply collect your deposit, and place it on deposit with a bank down the street, in a sense it is a waste of time.

gercoral

sorry for the silly question but:
how is your dividend from Credit union worked out? a lad in work said he collected 350euro? i just check my statement and i got 27.40 in december.

mu uncle has over 30,000 in savings and he got 49euro. i just don't understand?

Spocker

Every credit union is different; some pay a flat dividend, say 0.5% or less (in your uncles case it was ~0.16%) and some don't pay a dividend at all.

Theres been a recent trend toward interest rebates instead of dividends; with an interest rebate, you receive back a % of the interest you've paid on a loan over the previous 12 months (this could be your friend in works case).

In any case, the only way to know for sure is to get the documentation for your AGM, which should be sent to you - that will have the specifics for your own Credit Union

CINCLANTFLT

Spocker wrote: »

Every credit is different; some pay a flat dividend, say 0.5% or less (in your uncles case it was ~0.16%) and some don't pay a dividend at all.

Theres been a recent trend toward interest rebates instead of dividends; with an interest rebate, you receive back a % of the interest you've paid on a loan over the previous 12 months (this could be your friend in works case).

In any case, the only way to know for sure is to get the documentation for your AGM, which should be sent to you - that will have the specifics for your own Credit Union

Everything he just said! Note that the rebate may be quite large (10 to 20%) but most dividends are 0.5% or below... and it differs per CU...