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Credit Unions Paying Out 2011 Bonus Dividends

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Credit Unions Paying Out 2011 Bonus Dividends

One of the advantages of credit unions is that any profits credit unions make are paid back to their members. If a credit union has a good year and its reserves and capital are in excess of what is necessary, it will often make a special end-of-year payout (dividend) to its members. A credit union will usually determine the amount of the dividend based on how much deposits and loans a member has with the credit union. Some have a more complication determination of how to distribute the payouts. I found one credit union this year that factored in banking activities such as an active debit card.

In today's environment, these payouts have been rare. Just like banks, credit unions' profits have been hurt by loan losses, weak loan demand and low investment returns. Another cost to credit unions has been the assessments from the NCUA to pay for the corporate credit union bailout.

In January I reported on four credit unions that had bonus dividend payouts for 2010. I was only able to confirm 2011 bonus dividend payouts for one of these four credit unions. I learned of other credit union bonus dividends in this Dec 2nd CUNA article and in this Dec 9th CUNA article (Hat tip to the reader for sending the links of these).

In that January post, several readers reported that Northwest FCU paid a 2010 dividend bonus. I was not able to find any information on a payout for 2011. If you have news on a 2011 payout from Northwest FCU, please leave a comment. Also, if you know of any credit union not mentioned below that's giving out a 2011 bonus dividend, please leave a comment.

Most bonus dividends are small, but if a member has a large savings and/or loan balance, bonuses can be significant. One credit union reported a bonus dividend to one member of $3,100. What's the largest dividend bonus that you have ever received from a credit union? Did you have a large savings or loan balance?

Below are a few credit unions that have reported 2011 bonus dividends:

  • DFCU Financial reported a $21 million "Special Patronage Dividend" (up from $19 million last year). With 214,000 members, that comes out to $98 per member. According to the credit union, "Qualifying members receive a one-half percent (0.5%) dividend on their average loan and deposit balances, with each eligible member receiving at least $50. This includes all savings accounts and loan balances."
  • Gulf Winds Credit Union reported a "bonus dividend pool" of over $1 million. With 46,000 members, that comes out to $22 per member. The credit union doesn't give many details of how the payout will work in its announcement.
  • Wright-Patt Credit Union reported a "Special Patronage Dividend" of over $5 million. With 210,000 members, that comes out to $24 per member. According to the credit union "The Special Patronage Dividend is calculated on the members’ use of the credit union’s products and services." The credit union has several details about how the dividends are calculated in this page.
  • Guardian Credit Union in Alabama reported interest rebates and dividend bonuses totaling over $750,000. With 23,000 members receiving the bonus, the average payout will be $33. According to the credit union one member will receive $3,100.

Do the credit unions that pay annual dividends have the best deposit rates? Being profitable is a good sign that they're making loans which means they need deposits. DFCU Financial's share certificate rates are not at all competitive. Gulf Winds Credit Union is a little more competitive with its CD rates. Also, it offers a competitive reward checking account. Wright-Patt Credit Union offers the most competitive CD rates out of the above credit unions. Its rates are not the highest, but they're above average.



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Comments
12 Comments.
Comment #1 by nothlit posted on
nothlit
My credit union paid a 2.5% bonus dividend last year. That is, an additional 2.5% of whatever normal dividends had already been paid for the year. Ended up being about $2.80 for me. But then, I don't keep a huge amount in my credit union account since I get better rates elsewhere.

1
Comment #2 by Shorebreak posted on
Shorebreak
Ah, the good old days. Years ago I remember getting a bonus from my credit union on base when I was in the military. I'm sure it wasn't big but it was something added on to the already decent interest rates in effect back then.

1
Comment #3 by Carly (anonymous) posted on
Carly
I bank with several credit unions--I've never received a bonus dividend.  Now since OWS, all my statements have remarks on them about "dump your evil big bank and bank with us" and given the horrible interest rates they're paying it's getting irritating.

1
Comment #4 by Shorebreak posted on
Shorebreak
Since most credit unions have expanded their qualifying membership base to compete with banks perhaps those year-end bonus payments have instead gone to advertising expenses.  Either that, or none but a handfull of credit unions made a profit.  Their response, if questioned, will probably be that the customers are receiving their bonus through higher deposit rates.  Yeah sure.

2
Comment #5 by Anonymous posted on
Anonymous
Knowing how tough the regulators are these days, the credit unions are probably dumping a lot of their profits into reserves rather than paying them out as dividends.

2
Comment #6 by Anonymous posted on
Anonymous
Granite City Steel FCU paid a dividend of .25%

1
Comment #7 by Alicia (anonymous) posted on
Alicia
Closed all our accts. at Bethpage Federal Credit Union in NY.  They slashed their deposit rates for both liquid accts. and CD's to insulting levels.  And, over the past year, they rolled out a new logo and have two new spokesmodels ("Beth and Page") as part of a big marketing campaign that is highly insulting to women.  That's where our depost advantage there went -- to marketing and models.  We switched to Apple FCU, Discover Bank (great!!) and a small local c.u.  Not all c.u.'s are good news for their members.

1
Comment #8 by chief (anonymous) posted on
chief
nothlit, may I ask where else do you get better rates than credit unions ?

2
Comment #9 by pdxmale posted on
pdxmale
CHIEF   

 

it depends on the credit union and the bank === until 2 weeks ago Southern bank was paying 5% on a RCA account (now 4%). No credit unions were that high.

Some credit unions are paying just slightly higher than the MEGA BANKS.

2
Comment #10 by Jim DAvis (anonymous) posted on
Jim DAvis
 a pity Penfed didn't do this. Lots of blog readers have more than a few sheckles there.

1
Comment #11 by Anonymous posted on
Anonymous
I bank with USAA and recieved an e-mail a few days ago that said my yearly dividend will post soon. I'm not sure what the rate is because it has not yet posted but I'm sure there's something out there that would tell people if they cared to hunt for it.

1
Comment #14 by Anonymous posted on
Anonymous
Empower Federal Credit Union announced a $2.5 million "give-back" for 2011. The credit union is paying $2.5 million in "give-back" bonus dividends and interest rebates to reward Empower members for a successful year. This is the 4th year Empower has given the membership a $2.5 Million Give-Back! www.empowerfcu.com

1