Frequently Asked Questions
A co-operative is a voluntary group of people who come together for self and mutual help while a bank is profit oriented.
A co-operative (also Co-Operative; often referred to as a co op) is a business organization owned and operated by a group of individuals for their mutual benefit. Co Operatives are defined as autonomous associations of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through jointly owned and democratically controlled enterprises. A Co Operative may also be defined as a business owned and controlled equally by the people who use its services or by the people who work there.
To become a member of the Credit Union, one must purchase 20 shares. These shares can only be withdrawn when the individual no longer wishes to be a member of the Credit Union.
Withdrawable shares are usually the cash security for a loan. Deposits are withdrawable any time, whether there is a loan or not.
The Credit Union allows an individual the opportunity to become the owner of a democratically controlled financial institution. Since the credit union does not have profit maximization motive, most of the revenue it generates is paid back to the member’s income.
Interest is paid as follows:
▪ Deposits and Withdrawable shares – twice per annum at a rate of no less than 3%
▪ Dividends on Equity shares – Once per annum
▪ Patronage refund on loan interest – Once per annum
It is based on your rate of savings. The interest on fixed deposits is generally higher. However, when money is saved on shares it can be claimed as a tax deduction at the end of the financial year. This is not so for fixed deposits.
A beneficiary is the person who inherits your estate after you have passed. Someone who is authorized to withdraw is only allowed to transact business on your behalf during your lifetime.
A member of the credit Union is someone who has met the requirements for membership and has purchased at least 20 equity shares from the Credit Union while a depositor does not or cannot own equity shares. Examples of depositors are small business owners who open an account for their business and children’s accounts.
There are different requirements for the different loans. For loan information one should enquire at the Credit Union.
For members: $100.00 equity shares and for Depositors: $5.00
A patronage refund is a percentage of the annual loan interest payments refunded to the member.