When you join Valley Credit Union, one of Oregon’s local credit unions, not only do you become a member but you also become an owner. That means you benefit in ways big banks can’t match. In addition to lower fees, great rates, and exceptional service, our members across Oregon are eligible to receive dividends–a portion of our profits that are paid directly to our members.
It’s one of the most unique and rewarding parts of being a credit union member. And unlike traditional banks that only pay dividends to shareholders, Valley Credit Union gives back to the people who matter most: you!
Paying out dividends is a striking feature that sets us miles (and dollars) apart from traditional banking institutions. In this post, we’ll explain what credit union dividends are, how they work, and how they’re paid out.
What Are Credit Union Dividends?
Simply put, credit union dividends are a way for credit unions to share their financial success with their members. When Valley Credit Union earns more than it spends after covering operating costs, we return a portion of those earnings to our members in the form of dividends.
Most big banks, which often charge more for their products and services while simultaneously offering worse interest rates than Valley Credit Union, operate as for-profit businesses. As such, they only pay out dividends to their shareholders.
On the other hand, credit unions are not-for-profit financial cooperatives. That means that we don’t keep our profits to ourselves, we share them with our members. As a member and owner, you benefit directly when our credit union does well. It’s another reason to consider moving from bank to credit union.
How Do Credit Union Dividends Work?
At Valley Credit Union, we believe giving back should be simple and rewarding. Here’s how our member dividends work, from who qualifies to how they’re paid out.
Eligibility
All VCU members are potentially entitled to receive dividends. Each year, we determine eligibility based on a few key criteria, such as:
Eligibility may vary from year to year based on our financial performance and community goals. For example, in a recent year, members qualified if they had a checking account, an active loan, a savings balance, or 20+ years of membership.
In 2024, 77% of Valley Credit Union’s members received a dividend. The average payout was $43.88.
Related: Credit Union Account Options: The Essentials You Need to Know [Guide]
Payout
To understand how credit union dividends are paid out, we need to take a look at a few factors: rates, frequency, and process.
What is a dividend rate?
A dividend rate is the percentage used to calculate how much money you’ll receive as a dividend. Credit union dividend rates are based on the balance you hold in a qualifying account. For example, if your Ownership Accounts earns a 2.5% dividend rate, and your balance is $1,000, you’d receive a dividend payment of $25 at the end of the dividend period.
Our dividend rates are influenced by market trends and how the credit union performed financially that year. Rates vary depending on the type of account. They can vary from year to year, but they’re always designed with our members’ best interests in mind.
When are credit union dividends paid?
Here at VCU, ownership dividends are paid out once a year. At the end of each year, our Oregon-based credit union evaluates its financial position to decide whether we’ll issue dividends. In 2024, we had the great pleasure of reinvesting in our members to the sweet tune of $200k.
What is a deposit dividend?
A deposit dividend is a portion of the credit union’s profits that’s paid to members based on the money they have on deposit, like in a savings, checking, or Ownership Account. The more you keep on deposit, the more you may earn when dividends are distributed.
What is a dividend deposit?
A dividend deposit, meanwhile, is the process of distributing Valley Credit Union’s dividends to our members. When dividends are paid, the money goes into a member’s Ownership Account. The member can withdraw or move the payment, or leave it in the account to accrue even more interest. It really pays to be a VCU member!
Why Does Valley Credit Union Give Back To Members?
This is a loaded question! There are so many valid reasons for this practice, so let’s pick it apart a bit. Here why we return a portion of our profits to our members through dividends:
We Appreciate You!
We’re ever so grateful to have you onboard, and dividends are a way of saying thank you for your continued support as a member. It’s our way of sharing success and showing appreciation for choosing to bank locally.
Your Financial Wellbeing Matters
We know that financial stability plays a big role in your overall wellbeing. While having plenty of money won't assure your wellbeing, lack of sufficient resources can definitely result in you being less physically and mentally well.
Valley Credit Union is a community, and we take a sincere interest in our members’ wellbeing. In fact, we feel it’s our duty to help members build wealth and financial stability. Offering dividends is just one way we try to accomplish this.
We know that dividends may only be a small part of your financial picture, but they’re part of our larger commitment to helping you build lasting security.
Putting Our Money Where Our Values Are
As a not-for-profit credit union, we’re here to serve people and not shareholders. That means we reinvest in our members, our community and local economy. Our members and VCU team are a big, beautiful family. We strive to not only care for each other but also create a better world around us.
We feel, especially in current times, that paying dividends is an example of implementing social equity. It’s a way to democratize wealth, a small measure towards providing “enough” for everyone. It’s the right thing to do to make our community stronger and more resilient.
Frequently Asked Questions About Credit Union Dividends
Do I need to do anything to receive dividends?
Nope! If you meet the eligibility criteria for the year, your dividend will be automatically deposited into your Ownership Account, no action needed on your part.
Are credit union dividends taxable?
In most cases, yes. Dividends are considered taxable income, and you’ll receive a 1099-INT form if you earn $10 or more in dividends during the year. Be sure to consult your tax advisor if you have questions.
How can I increase the dividend I receive?
While your dividend amount vary year to year, maintaining a higher balance in qualifying accounts, like your Ownership Account, may increase your payout. Using more of Valley’s services, like loans or checking, may also help with eligibility.
Where can I see my dividend?
Once issued, your dividend will appear in your Ownership Account. You can view it through online banking, our mobile app, or by contacting us directly.
What happens if I don’t qualify one year?
Eligibility is determined annually based on a variety of factors. If you don’t qualify one year, don’t worry, you may still qualify in the future. We're always transparent about the criteria and happy to answer any questions.
VCU’s Ready To Show You Some Love, Too
Are you ready to do your banking where it literally pays to do your banking? If so, we’re standing by and ready to welcome you into the VCU family.
In addition to great perks, like ownership dividends, that you won’t find at traditional banking institutions, we offer a wide variety of financial products and services. You’ll get to take advantage of our favorable rates, low fees, and exceptional service as well.
We encourage you to become a member today, and don’t hesitate to reach out with questions or for assistance. We’re always happy to help!