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ProfitShares Program: Q & A

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  3. ProfitShares Program: Q & A

Synergy Credit Union’s ProfitShares program is a unique profit-sharing initiative that rewards its members—the shareholder owners—with a portion of the credit union’s profits. It’s our way of giving back to the community and emphasizing our commitment to our members.

Earn ProfitShares rewards (profit sharing) each year; the rewards are paid into your ProfitShares account.

  • ProfitShares rewards are based on:
    • Interest you have on qualifying loans.
    • Interest we have paid you on non-registered savings and term deposits.
    • The dividends you earn on your ProfitShares balance.
  • Few products do not qualify for ProfitShares – mostly due to government regulations, such as registered products (RRSPs). Those products that do not qualify offer favorable upfront rates.
  • Members automatically receive ProfitShares on qualifying products unless they opt out.
  • Each year, your democratically-elected Board of Directors will determine your annual ProfitShares allocated into your ProfitShares account. Your ProfitShares allocation is equivalent to a rate bonus or discount.
  • Once your ProfitShares account balance* reaches a certain amount each year, you get a ProfitShares cash payout (of the amount over that balance) that goes directly into your account later in the year.
*$10,000 for personal and $30,000 for businesses/ organizations.
Each year, 20% of Synergy’s pre-tax profits are allocated to our members’ ProfitShares accounts. Once members reach a certain balance in their ProfitShares accounts, they receive a cash payout to their personal accounts. Just for doing their day-to-day business with the credit union.

For example:
  • 2% to Borrowers
    A $325,000 residential super mortgage at 3.25% would have paid interest of $10,562 per year. At the 2021 allocation rate of 2% (2% X $10,562 = $211), this would equate to Profit Sharing of $211 (which is like receiving an interest rebate of 0.07%). Your adjusted interest rate paid would be 3.18%.
  • 7% to Savers
    A $100,000 term deposit at 1.00% would earn $1,000 interest per year. At the 2021 allocation rate of 7%, (7% X $1,000 = $70) this would equate to Profit Sharing of $70 (which is like receiving a bonus interest rate of 0.07%). Your adjusted interest rate received would be 1.07%.
  • 1% Share Dividend
    If a member had $4,000 in their ProfitShares account on December 31st, they will receive a 1% dividend of $40 ($4,000 X 1% = $40).
At Synergy Credit Union, unlike other financial institutions, our shareholders are you, our member-owners. This means when we profit, so do you … we call it ProfitShares.

ProfitShares rewards you for doing your financial business with us. It does pay to be a member-owner and the more business you do with us, the bigger your share of the credit union’s profits. People always come first at Synergy Credit Union and our profits stay in the communities we serve.

The calculation for your ProfitShares is based on the interest you have paid us on your qualifying loans and mortgages, plus interest we have paid you on your non-registered savings and term deposits. Plus, you earn a competitive dividend on your ProfitShares investment (the current balance in your ProfitShares account).

The decision as to how much is allocated and paid out for ProfitShares is made annually by your democratically-elected Board of Directors. ProfitShares allocations will be added to your ProfitShares account.

Those who are at a certain balance in their ProfitShares account* will receive the amount above it into your personal account pack every year. Those who are not there yet, can get there in about or sooner – depending on the products you have with Synergy. The more business you do with us on qualifying products, the bigger your share. It’s part of our credit union difference and pays to be a member.

*Any amount over $10,000 for personal members and $30,000 for business/organization members will be deposited directly into the member’s account pack. If you aren’t at the limits yet, you can get there sooner with qualifying products and services.

Each year, our Profit Sharing program shares in profits with our members through annual allocations.

With allocations each year, your ProfitShares balance builds up based on the business you do with the credit union. Once your ProfitShares account reaches a certain balance ($10,000 for individuals and $30,000 for businesses/organizations), you will receive a cash payment in your account pack (chequing account) later in the year.

Other considerations for ProfitShares:

  • If you are 69 or older, you can check with your branch for special options on payouts.
  • Non-profit organizations may qualify for payouts each year. 

You can check out your monthly statement, eStatement or contact us for your ProfitShares balance. You will also receive your ProfitShares balance on your annual statement if you qualify for a ProfitShares payout. Additionally, if you qualify for a ProfitShares cash paydown, you will see this transaction on your statement which is typically posted close to the end of the year. We can also help you determine if you will be receiving ProfitShares deposited into your account pack or how you can earn more. If you have further questions, please don’t hesitate to contact our Member Contact Centre by phone (1.866.825.3301), email (webmail@synergycu.ca) or by Live Chat on our website. We’re here to help.

*$10,000 for personal members and $30,000 for business/organization members

In the event of a member’s death and if their account is closed, an application to receive equity from a members’ ProfitShares account can be made. The ProfitShares would be handled as a part of the estate funds. The executor would handle the documents in regards to this account as they settled the other accounts held with Synergy.

If a member is to close their entire membership at Synergy and move to another financial institution, their ProfitShares are paid out to them. Depending on the balance, they may be paid out immediately or they may be retained for one year and the paid out at that time.

While ProfitShares allocations may be subject to taxation, redemptions are not. For specific inquiries, we recommend consulting your accountant.

Unfortunately, Synergy Credit Union's ProfitShares cannot be transferred from credit union to credit union because they are based on the profits of our individual credit union. Our shareholders are you, our member-owners, which means when we profit, so do you ... this is why we call it Profit Sharing.

With allocations each year, your ProfitShares balance builds up. Once your ProfitShares account reaches a certain balance ($10,000 for personal and $30,000 for business/organization accounts), you can expect to receive a cash payout in your account later in the year. In this case, you wouldn’t need to transfer, but you can receive a cash payout over this amount.

However, if needed, ProfitShares can be redeemed after a one-year waiting period after the account is closed. The reasoning ProfitShares are somewhat restricted is that the credit union is required to hold this equity as investment capital. It is invested to build strength in your credit union, which helps us to provide the great tools, great programs and great services our members are accustomed to. Hence, there is a waiting period so we can properly plan.

The Profit Sharing Program allows members to share in your credit union’s profits through allocations to their ProfitShares account. Allocations are based on interest paid on loans and earned on savings and term deposits (you may also earn a dividend on your ProfitShares balance too).

With allocations each year, your ProfitShares balance builds up based on the business you do with the credit union. Once your ProfitShares account reaches a certain balance ($10,000 for individuals and $30,000 for businesses/organizations), you will receive a cash payment in your account pack (chequing account) later in the year.

Other considerations for ProfitShares:

  • If you are 69 or older, you can check with your branch for special options on payouts.
  • Non-profit organizations may qualify for payouts each year. 

Up Next: How well is my money protected?

Deposits are fully guaranteed by the Credit Union Deposit Guarantee Corporation (CUDGC).
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