Credit Union Dividend

Stabshauptmann

I havent used my credit union account in a number of year and when I went in today to make a deposit interest was added on for the past 3 years (I got 3 different dividend receipts for the different years).

Because of my account balance and the declared dividend rate it was very easy for me to calc dividends and I noticed that what I expected and what I received were not the same.

I calculated what I expected and what I received for the past 3 years and all of them were different, and different by different percentages.

Obviously I should ask the credit union staff to explain this to me, but since they would be closed by the time Id get back there today and I wont be able to tomorrow, perhaps someone here could offer a few reasons.

I got each of the div % from that years annual accounts (and I know from the next years accounts that the previous years % was approved).
Its easy for me to calc as there have been no withdrawals or lodgements.
I checked to see if the difference could be net of tax (it shouldnt be, I do my own tax), but its not. The % difference changes every year anyway.

Do credit unions impose charges on accounts like a bank would?
Even if that is the source of the difference, am I right in thinking they shouldnt be making any deductions from my dividend, but instead levying the charges separately.

515

I don't think Credit Unions really pay interest as such... Mine certainly doesn't. Instead I get a 'dividend'.

Essentially putting your money into a credit union, is actually investing in the Credit Union. So at the end of the year all the profits made are divided up amoung all the members based on how much they have invested.

For this reason the amount of dividend paid out each year would be different, it's not a fixed percentage.

dotsman

515 wrote: »

I don't think Credit Unions really pay interest as such... Mine certainly doesn't. Instead I get a 'dividend'.

Essentially putting your money into a credit union, is actually investing in the Credit Union. So at the end of the year all the profits made are divided up amoung all the members based on how much they have invested.

For this reason the amount of dividend paid out each year would be different, it's not a fixed percentage.

Precisely

stepbar

A credit unions tends to work better if you have money borrowed, as you get an interest refund at the end of the yr. As for having credit balances, the rate is very miserly. However it varies from union to union.

Stabshauptmann

Jesus h titty ****ing christ. What I see from these replies is a bunch of people so anxious to be seen to be knowledgeable that they didn't spare the time to actually read the post.

Posts about the adv of CU loans and simplistic definitions of what divs are, are completely irrelevant to this thread.

It is crystal clear from my op that I know its a dividend and that I realise that % divs can change year on year.

That's why I said I got the % from each relevant yrs annual accounts and checked to see that those proposed divs were approved.

Its also the frigging thread title!

The question was why the dividend received didn't match the div declared.

The sound to noise ratio is getting pitifully low on boards.

if someone didn't know but took a guess I'd thank them for their effort. What happened here is that 3 posters saw the title and did a mind dump on the words they saw i.e. A post on how the CU works and what divs are, without ever reading the post. That's the opposite of helpful

Anyone

Things to note:

(1) Financial year is Oct-Sept
(2) Dividend is earned daily based on your balance at the end of the day, any fluctuations is going to affect your amount received. It is not paid on the balance on your account at year end
(3) You account may have had DIRT deducted.Yes Credit Union dividends are liable for DIRT
(4) You may have had contributions deducted from your dividend amount to pay for such things as League affiliation fees, Death Benefit Insurance, International Development Fund

and lastly....and most importantly.....

(5) ASK YOUR CREDIT UNION-All Credit Unions are seperate indivdual organisations, and what happens in one may not happen in another. So what anybody tells you here is probably completely irrrelevant.

romah

aye aye Kaptain

The credit union financial year runs from 1st October to 30th Sept each year

Dividends are normally paid out in December each year following the AGM
for the previous financial year.

Credit unions dividends are liable to DIRT (20%) and may be deducted at source so check that out with the staff ?? ..i assume thats what you meant by tax in your post.

The only charge that is levied on a credit union account each year is a 90 cent fee which should be called "Affiliation Fee"

Hope this helps you

Stabshauptmann

Anyone wrote: »

Things to note:

(1) Financial year is Oct-Sept

Thank you, I had noticed that but didnt include it in my op.

(2) Dividend is earned daily based on your balance at the end of the day, any fluctuations is going to affect your amount received. It is not paid on the balance on your account at year end

As I said, there were no lodgements or deposits making it easy to calculate

(3) You account may have had DIRT deducted.Yes Credit Union dividends are liable for DIRT

Like I said, I have not opted to receive my divs net of tax, and I calc the applicable tax but that didnt account for the difference.

(4) You may have had contributions deducted from your dividend amount to pay for such things as League affiliation fees, Death Benefit Insurance, International Development Fund

Thank you, I will check if thats the case

(5) ASK YOUR CREDIT UNION

Kaptain Redeye wrote:

Obviously I should ask the credit union staff to explain this to me, but since they would be closed by the time Id get back there today and I wont be able to tomorrow

At the earliest opportunity, I will.

edit: Thanks romah as well for your reply

Toots

Kaptain Redeye wrote: »

Jesus h titty ****ing christ. What I see from these replies is a bunch of people so anxious to be seen to be knowledgeable that they didn't spare the time to actually read the post.

Posts about the adv of CU loans and simplistic definitions of what divs are, are completely irrelevant to this thread.

It is crystal clear from my op that I know its a dividend and that I realise that % divs can change year on year.

That's why I said I got the % from each relevant yrs annual accounts and checked to see that those proposed divs were approved.

Its also the frigging thread title!

The question was why the dividend received didn't match the div declared.

The sound to noise ratio is getting pitifully low on boards.

if someone didn't know but took a guess I'd thank them for their effort. What happened here is that 3 posters saw the title and did a mind dump on the words they saw i.e. A post on how the CU works and what divs are, without ever reading the post. That's the opposite of helpful

Kaptain Redeye, ease up on the vitriol there please.