One of the biggest reasons that distinguishes Talka Credit Union from the big banks and many other credit unions is its Interest Rebate Program. Annually, the Board of Directors reviews Talka’s profitability and sets aside enough in retained earnings to meet regulatory capital requirements and necessary planned growth. In keeping with Talka’s cooperative principles and members’ objectives, the Board approves a distribution of profits via interest bonuses and rebates to members on December 31st each year.
In 2017 and 2018, the Board has approved a 12% interest rebate on member deposits and 6% interest rebate on residential mortgages and personal loans. By way of some examples,
- Member A has a $100,000 five-year term deposit at 3.00% and received the annual interest payment $3,000 during the year. At the end of the year, the Board approved an additional interest rebate of 12% or an additional $360 which increases the effective yield to 3.36%. If the term deposit was invested in a registered product like a RSSP, RRIF or TFSA the rebate would be added to the contract balance.
- Member B has a $500,000 Home Equity Line of Credit (HELOC) at 3.85% with an average balance of $100,000 and paid Talka $3,850 in interest on this loan. At the end of the year, the Board approved an interest rebate of 6% of the interest paid and refunds $231 to Member B reducing the effective interest rate to 3.619%.
Interest rebates are just one of the ways the credit union wants to show its’ appreciation by sharing our profits with our members.