How Are Dividends Calculated?
Dividends come from the profits generated by the credit union operations. At the end of the dividend period, the credit union’s profit – the difference between the interest earned from loans and the interest paid on deposits – must be distributed to shareholders in the form of a dividend. The total amount of profit is divided by the number of shares on deposit to arrive at the per-share dividend amount. The per-share dividend amount is then multiplied by the total number of shares held by each member to arrive at the dividend each member is paid.
