Can someone explain why Credit Union Dividends are so low compared to interest rates of the banks. Looking at my own CU, the results from financial report look good with a healthy surplus yet they plan not to pay any dividend for 2012.
Can understand the accounts, but not how this could affect such a low interest dividend, historically 0.5%.
P
But they're paying better interest than interest and dividend rates on offer from most CUs.The banks aren't paying Dividends either.
Have to agree. Bank for regular or fixed term saving/current account. CU for local access to cash and loans. You have to weigh up the sacrifice of interest for this.It's just does not make sense to save (especially for a child) in the credit union and what the above demonstrates is - Imagine the damage after 7 years inflation !May as well just throw €1000 out the window.
I am still learning - but given the low / no! interest paid depending of Credit Union and the very high APR interest rate on loans compared to banks, a Credit Union account is basically an insurance policy in case you need to borrow small sums of money.
Welcome views...
P
Still trying to get my head around the Credit Union setup before opening an a/c.But they're paying better interest than interest and dividend rates on offer from most CUs.
Still trying to get my head around the Credit Union setup before opening an a/c.
So CU is good if you want to save a bit of pin money say €20 a week and may want access to a car loan of ,say €10k?
The CU dividend is their way of paying interest,or is in addition to interest?
CU's have deposit accounts but most people just save in the form of shares getting an annual dividend,
It's like a bank except that you usually have to have 25% of the amount you want to borrow on deposit rather than just borrowing 75% of that amount and using your savings for the balance. Also as a result of this policy the effective interest rate charged is often significantly higher than the quoted APR.generally if you begin saving regularly in a CU you will be able to get a loan when you apply for a loan. To get a loan of say 10k you probably need a few months at least of regular saving of a few k. I've had a few CU loans down the years, once you pay off your 1st CU loan with no problems its easier to get larger subsequent loans. You have the usual requirements to show them your payslips/P60 also to show you can repay, but you don't need to have a job to get a loan, just an income of whatever source in order to be able to repay.
And you usually get poor rates of return on deposits and on shares (but you'll only find out at the end of the year what you get on these), they are generally taxable like bank deposits and many CUs are also in financial trouble.CU's have deposit accounts but most people just save in the form of shares getting an annual dividend, effectively the same as interest with DIRT deducted etc Quite a few CU's are paying zero or very low dividends now so banks are paying much better interest in comparison. I actually know someone who afraid of the banking uncertainty moved substantial bank savings into their CU, but the CU had a zero dividend last year and they obviously got zero return and no greater security as the bank savings are as equally guaranteed as the CU savings by the Gov.
Rich in Spirit, I would love to know what CU's are paying up to 3%. The other postings surveying CU dividend rates are on average below 1%. Some paying none at all.
P
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