Profit Sharing - Dividends
Annually, based upon the previous year's earnings members may be paid profit-sharing in the form of dividends. On June 25, 2020, the 2019 AGM was held in a virtual format through GoToMeeting. KCCU members approved sharing in $265,000 of after-tax profit. The level of profit-sharing is determined at the AGM and voted on by members present. In theory, dividends might not be paid every year. KCCU members should be mindful of the difference between possible dividends and guaranteed interest when choosing an account.
Over the past 5 years, members shared in over $1.4 Million dollars of after-tax profit. Each year the level of dividends is determined by the performance and the need for capacity building at your Credit Union. In a competitive and highly technologically-driven world, KCCU spends money to ensure its members have all of the services they could get elsewhere but source locally, at the best price, and with maximizing member benefit as a driving force behind decision-making. KCCU has increased financial literacy materials available to members. With a strong community-minded focus, your credit union is focused on member advocacy, co-operative value promotion, and making sure members have access to top-quality financial services for years to come.
In the past dividends were paid and 80% of the proceeds were paid to holders of deposits in the Dividend Savings Account and the remaining 20% was paid on Member Shares to all members. The depositors received a dividend at the end of the year for their balances in the Dividend Savings. That will not be the case in 2020 at the AGM in early 2021. The Board decided in 2019 that it was a good idea to introduce a High-Interest Savings Account (HISA) and to consider this portion of the dividend an interest expense. Now members are paid monthly interest on the holdings they have in the HISA based upon their daily balance. In early 2020 due to the impact of COVID-19 on the local community, the Board decided to donate $25,000 to local charities to help with food security and to focus on paying futures dividends on services ALL members hold (The membership equity share account).
This will make all future dividends payable to all members. This separates the dividend from interest on deposits and provides depositors more certainty and flexibility. If you want to take advantage of this and have not already, we encourage you to move your monies from the Dividend Savings Account into a High-Interest Savings Account. The Dividend Savings Account will no longer receive dividends and will eventually be phased out in favour of this more straightforward benefit for depositors and a universal dividend for all members.
KCCU is one of Canada's premier financial institutions, strong, healthy, and profitable with a community-minded approach to business and it is owned by its members!