Savings

Savings

Why is saving with a credit union better?

Whether you’re saving for something in the future or just for a ‘rainy day’, regular saving is a good idea.

Regular saving with your credit union is an even better idea. At your credit union, you’re not just a customer, you’re a member of a successful financial co-operative.

Members of Wicklow and District Credit Union Ltd pay an entrance fee of €1.27  and you will need to hold a minimum saving of one share. Members enjoy equal rights to vote (one member, one vote) and participate in decisions affecting the credit union.

  • Savings are insured at no direct cost to the eligible member.
  • No hidden fees or transaction charges.
  • If  Wicklow and District Credit Union Ltd. declares a dividend at the end of its financial year, each share you hold for that year is eligible for a dividend. The more shares you have, the greater the dividend you will receive.

When a member who is over 16 years of age opens a credit union account, he/she is entitled to nominate a person (or persons) to receive his/her property in the credit union on his/her death. Property includes shares, deposits, loans and insurance proceeds. This is of benefit if the member dies without leaving a will as the property left in the credit union will not have to pass through the sometimes timely intestacy process (Max amount €23,000).

Are my savings secure?

Credit Unions in the Republic of Ireland are covered by the Deposit Protection Scheme which is administered by the Financial Regulator. This is a scheme that can provide compensation to depositors if a credit institution is forced to go out of business. It covers deposits held with banks; building societies; and credit unions. The maximum amount a credit union member can receive under this scheme is €100,000.

The Deposit Protection Scheme covers:

  • current accounts;
  • demand deposit accounts;
  • term deposit accounts;
  • share accounts and deposit accounts with building societies; and
  • share accounts and deposit accounts with credit unions.

In addition to this, the Savings Protection Scheme (SPS) owned and operated by the Irish League of Credit Unions is also available to proactively intervene to protect members’ savings by making available financial assistance to help any credit union which may experience difficulties.

Also, members’ savings are insured through Life Savings Insurance (subject to certain terms and conditions).

What return will I get on my credit union savings?

Every share you hold with your credit union for the year is eligible for a dividend if declared. A dividend is the return on your shares and it is paid by your credit union out of surplus.*

*Past performance is not a reliable guide to future performance.

The amount of your dividend will depend on:

  • The amount of shares you have saved (one share is equal to €1).
  • The surplus income available for distribution by your credit union to members.

Only members of Wicklow and District Credit Union Ltd. receive a dividend from this credit union.

Do I have to pay DIRT?
Deposit Interest Retention Tax (D.I.R.T.), at the rate of 41% (from the 1st January 2014) is deducted at source by deposit takers (e.g. banks, building societies, Credit Unions, Post Office Savings Bank, etc.) from interest paid or credited on deposits of Irish residents.
From this year on Credit Unions must deduct DIRT from dividend paid to all members, unless the member is exempt from DIRT. Please note that the only members who can be exempt are those aged over 65 who meet the criteria laid down by revenue or those who are permanently incapacitated and meet the criteria laid down by revenue (click on link for criteria http://www.revenue.ie/en/tax/dirt/leaflets/de1.html or www.revenue.ie/en/tax/dirt/leaflets/de1.html). Children are not exempt.
Reporting to Revenue
Following the introduction of the Return of Payments Regulations 2008, all financial institutions (including credit unions) are obliged to report details in respect of dividend and interest to the Revenue Commissioners. In summary, credit unions must report annually certain details in respect of dividend or interest payments to members in excess of €635; they must also report the first relevant dividend or interest payment on new accounts, irrespective of the size of the payment.
Financial Institutions including credit unions must make reasonable efforts to seek Tax Reference numbers (PPS Numbers) from members,
Some Important Points to Note:

  • The Regulations do not apply to Loan Interest Rebates
  • The Regulations do apply to all Share and Deposit Accounts
  • The amounts to be reported are the gross divided or interest i.e. before any deductions including DIRT

 

Can I have easy access to my savings?

You can withdraw your savings provided they are not pledged as security on a loan.  However, you are encouraged to keep your savings intact, so that:

  • They may continue to earn a dividend.
  • They continue to benefit from the Life Savings Insurance protection.

Your credit union will be happy to talk to you about suitable alternatives to withdrawing your savings.

Can anybody save with the credit union?

Members of a credit union are united by a common bond.  This is a characteristic that every member has in common.  Wicklow and District Credit Union Ltd common bond covers anybody living or working within a 10 mile radius of Wicklow Town and Rathnew.

Anyone within the common bond is eligible to apply for membership, and start saving as soon as they are admitted.  So, whatever you’re saving for – a car, home improvements, a big day, holiday, school or college fees, your place will give you a fair deal.

Life Savings Insurance is payable on the death of the eligible member, subject to policy terms and conditions.

  • The insurance benefit payable will be in proportion to the amount of savings that a member has made during the term of membership.
  • The benefit is also dependent on the member’s age at the date lodgements are made to the account.
  • Amounts saved after the 70th birthday are not insured.  However, cover built up before the 70th birthday remains in force after the 70th birthday.
  • Withdrawals of savings can affect Life Savings cover.