Profit Sharing

Member Dividends

Profit Sharing - Dividends

Annually, based on the previous year's earnings members may be paid profit-sharing in the form of dividends. On April 5th, 2022, the 2021 AGM was held in a virtual format through GoToMeeting. KCCU members approved sharing in $32,000 of after-tax profit. The level of profit-sharing is determined at the AGM and voted on by the members present. The proposed level for 2022 is approximately $75,000 in the form of a 5% member equity share dividend and a 10% service charge rebate subject to member ratification at the 2022 AGM to be held virtually on March 28th, 2023. 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.

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 the financial literacy materials available to members including tips on member strategies and options for mortgage renewals during periods of rising interest rates. With a strong community-minded focus, your credit union is focused on member advocacy, cooperative 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 was changed 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 on their minimum daily balance. Moving forward, the focus was on paying dividends on services ALL members hold (The membership equity share account or service charge rebates for members who do not have free chequing accounts).

This will make all future dividends payable to all members. This separates the dividend from interest on deposits and provides depositors with interest-level certainty and flexibility. In 2022, The HISA had members' deposits which were paid $313,000 in interest, well above previous annual dividend levels, made possible by KCCU's improving margin, credit, and investment yield and growth. Compared to past dividend levels of $250,000-$300,000 this demonstrates KCCU's improved financial commitment to members which includes lower mortgage rates for borrowers and rising interest rates for depositors. If you want to take advantage of the HISA 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!