Dividends—What They Are, and How They Benefit You

Monday, December 10, 2018

Young people at a cafe gathered around a laptop.

It turns out, investing your money with SAFE can bring you more than just a sense of security. It could potentially help you turn a profit, too.

Yep. You read that right. If you’re new to banking through credit unions, or you’re a younger SAFE member just now immersing yourself in the world of personal finance, you might not be familiar with the concept of earning dividends.

Let’s dive in and explore this subject in more detail.

Dividends—a basic definition

Just what is a dividend, anyway?

It’s money that an account holder like you earns from a credit union, like us. We pay you for entrusting us with your hard-earned cash, and for agreeing to let us draw on that cash to make loans to other members.

Generally speaking, there are two types of dividends that credit union account holder can earn:

  • Simple dividends – Which are based solely on the amount of money that you put into your account
  • Compound dividends – Which are based on the money that you put into your account as well as the dividends that you’ve already earned

Of the two types of dividends that exist for credit union members, compound dividends are unquestionably the more lucrative option. (Which is, of course, why SAFE offers compound dividends for select account options.)

What sorts of dividends can I earn at SAFE?

At SAFE, our members earn quarterly dividends.

This means that they’re paid out four times per year. These dividends are based on the average daily balance in your account at the time of compounding.

Here’s a quick rundown on what you can expect, in terms of annual percentage yields (APYs), from our various account types:

  • Traditional Checking Account – 0.10% APY
  • Y Checking Account – 0.10% APY
  • SAFE Insured Money Management Account (SIMMA) – between 0.35% and 0.50% APY (depending on how much is in your account)
  • Regular Shares Savings Account – 0.20% APY
  • Flexible Savings Account – 0.25% APY
  • Holiday Club Savings Account – 0.20% APY
  • Y Savings Account – 0.20% APY

How SAFE’s dividends benefit you

When you’re a member with SAFE, you’re more than just an account holder. You’re a partial owner of our organization.

Think about it in corporate terms. If you’re a shareholder—if you’ve invested your hard-earned money into an organization—then that organization’s leadership answers to you, and you reap the benefits of their financial success in the marketplace.

The same is true at SAFE, where, as mentioned previously, you earn dividends based on the amount of money that you invest in your account on a regular basis.

Ready to get started? To invest your cash in an institution that has your best interests at heart? Earn the dividends you need to get ahead—open an account with SAFE today!