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 €1.20 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).
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.
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.
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.
For reasons set out below, the board of directors of Wicklow and District Credit Union Ltd has reluctantly decided to limit the amount that an individual member can lodge into savings each month to an aggregate amount of €2500 the maximum annual lodgement will be €20,000 (excluding loan repayments). This limit will take effect from 1st October 2017 and will be reviewed periodically by the board thereafter. The total balance a member may hold across all savings balances from 1st January 2021 is €50,000.
The reasons for imposing the limit are as follows:
- Savings in Wicklow and District Credit Union are growing rapidly, resulting in an increasing amount of excess funds in the credit union.
- We have to invest these excess funds in a limited range of investment products, primarily bank deposit accounts. As you may know, bank interest rates are barely above 0% and in some cases are negative.
- In addition, credit unions have to put aside additional capital from their income in respect of the amount of savings held – this reduces the amount available to decrease loan interest rates, pay dividends and invest in new and better services for members.
- We expect that the €2,500 monthly limit will reduce the inflows of savings to a more acceptable and prudent level.
We apologise for any inconvenience caused by this decision but hope that you understand the rationale for it.
If you have any queries, please speak to a member of our staff.
DO I HAVE TO PAY DIRT?
Deposit Interest Retention Tax (D.I.R.T.), at the rate of 33% (from the 1st January 2020) 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 €300; 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
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).