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Savings as shares in a Credit Union are a better way to save. You are not just another customer but an active member of a highly successful financial co-operative. Yes, you have a share in the ownership of the Credit Union. Along with having a say in the operation of the Credit Union you also earn dividends.
Benefits of Credit Union savings
- Savings balances over and above any loan you may have are available to you to withdraw on demand.
- High dividends for savings available on demand, you will not get a higher return at the same level of risk.
- Free life cover on saving up to € 13,000 (subject to terms and condition)
- A savings protection scheme is in place to the benefit of the member up to € 12,700
- There are no transaction charges or fees.
For small to medium savers your Credit Union is where you belong.
Types of Share Accounts
Regular Share Accounts
- Members present accounts with Credit Union are considered as a Regular Share Account. These accounts are suitable for those who are not liable for income tax.
- The onus is on the member to declare their account to the Revenue Commissioners.
- Dividend rate declared at A.G.M. is posted gross to members accounts.
- No disclosure is required by Credit Union.
Special Share Accounts
- Member must request in writing that their account be changed to a special share account.
- Dividend paid to member net of DIRT.
- Return made by Credit Union does not include individual members details.
- Member can hold both a regular or special share account but not both
Special Term Accounts - 3 or 5 Years
- Declaration must be signed by member to open Special Term Account
- First €480 of dividend is tax free on a 3 year account or €635 on a 5 year account
- On Dividend on excess of €480 or €635 DIRT is paid at a rate of 20%
List of account (names, address) opened in the year to 31st March must be sent to the Revenue Commissioners
- Once off lump sums, only will be lodgable to these accounts subject to the limits outlined below
Members holding 3-year accounts can convert their account to 5-years Term account at any stage during the term of the account, but it is not permissible to convert your account from 5 years to 3 years.
Members savings in all five-accounts will be fully insurable up to Credit Unions savings limit. Savings are aggregated and cover purposes. The five account types are:
- Deposit Account (subject to dirt)
- Regular Share Account (not subject to dirt)
- Special Share Account (subject to dirt)
- Either Medium Share Account (3 years) or
- Long Term Share Account (5 years)
Special Term Account - 3 year and 5 year
- Computer system must always show withdrawable date of account
- Member must be over 16 years of age
- Members entitled to dividend must open account
- Only one account can be hold by any one individual
- Joint accounts are allowed, in the case of married couples two joint accounts can be hold at the same time
- Members can transfer as much as they want from existing Credit Union savings to open a medium/long-term account
- Members transferring money from an outside source - maximum sum €7.620
- Once off lodgement up to €7,620 is allowed by members. No further lump sum lodgements allowed
There are penalties for early withdrawal. Account becomes a Special Share account and all future dividend is taxed at 20% and all previous dividend is taxed at 20%
- A member on reaching their 60th birthday during the term of the account can make a once-off withdrawal. There is no limit on this amount. Account must have been opened before the members 60th birthday.
Savings and Loans
Money in special term account can be used as collateral against a loan. Delinquents; funds can be applied to account in default provided that:
- Such shares were pledged as security
- Default of not less that 6 months has occurred
- Credit Union has followed standard procedures to recover the loan.
- Credit union members can rest easy in the assurance that their savings are safe. Credit Unions in Ireland, which are affiliated to the Irish League of Credit Unions, are secured in several ways:
- All officials of credit unions, whether volunteers or staff, must be fidelity bonded.
- Members savings within certain limits are insured through Life Savings Insurance.
- All monies received in the credit union are properly recorded and lodged regularly.
- Full financial statements are prepared and can be examined by members.
- Annual independently audited returns are lodged with the relevant authority, The Irish Financial Regulatory Authority.