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Watch-it-Wednesday: What is a Dividend?

"A [dividend is a] distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield." -Investopedia



Many credit unions are able to offer high dividends to their membership (that's you) because the members own the credit union - not shareholders. Dividends, then, act as a direct reward to credit union members, as a "thank you" for their membership. These dividends often come in the form of high-interest in savings accounts, typically compounded daily and credited to members' accounts monthly.

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