Profit Shares Primer

PROFIT SHARES PRIMER FROM VISION CREDIT UNION.

Credit unions are financial cooperatives, which means that you benefit when we succeed. In 2024, Vision Credit Union returned $35 million in profit shares to our members across Alberta. Learn how profit shares work and how you can get your share of the profits.

WHAT ARE PROFIT SHARES?

Every December, Vision tallies up our finances for the fiscal year and determines how much of the profits we can share with our members. We then deposit these funds – PROFIT SHARES – into our members’ accounts. Nice, right?

HOW DOES PROFIT SHARING WORK?
Vision returns profit shares to members in two ways: Profit Shares Patronage Allocation (Common Shares) and Cash Payout of Common Share balances.

1. Common Shares:

All Vision members have a Common Shares account. It’s what you get for the $1 you pay when you open an account. Members accumulate Common Shares when they earn interest on accounts and investments, and pay interest on loans and mortgages. The interest you earn and pay determines your profit share payout for the year. Vision deposits this payout into your Common Shares account.

Here’s what that looks like:  Imagine you had a mortgage, a loan and an RRSP with Vision.

At 25%, Vision’s profit shares allocation was the highest paid by any credit union in Alberta in 2022.

2. Cash Payout:

Every year, Vision members receive a cash payout based on the amount in their Common Shares account. Cash payouts have equaled 10% of Common Share balances in the past 10 years.  If the total balance of your Common Share account was $3,332.50, you would have received a cash payout of $333.25.

But here’s where profit sharing gets really good:  The amount in your Common Share account accumulates over time through the annual deposit of profit shares. As this Common Share account total grows, so does your cash payout. For example, if you became a Vision member five years ago and received $3,000 in profit shares every year, your account would have grown to $15,000. That means your cash payout would be $1,500!

CAN I CASH OUT MY COMMON SHARES?
Common Shares are an investment in your credit union. They can be redeemed in the event that you move out of the Vision trading area or upon death, but they’re best suited for long-term investing. With the cash payout occurring annually, you’ll reap the financial rewards of your credit union membership every year.
Profit shares, common share and cash payouts shown here are accurate examples of past rates, but are intended for informational and illustrative purposes only. Please feel free to talk with one of the friendly Vision Credit Union member service representatives for more detailed information about the benefits of profit sharing.