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Savings in a Credit Union are very important for two main reasons:

  • To help the Member
  • To help fellow Members

Firstly, as part of our philosophy of encouraging Members to manage their finances wisely, we recommend that they save something, even a small amount, on a regular basis, as this has the following advantages:

  • You will build up a significant balance over time that YOU will own.
  • You will be able to use this as collateral to access loans on competitive terms.
  • You will benefit from our Life Savings Insurance Scheme that will increase the value of your savings in the event of death or permanent disability.
  • You will receive an excellent return on your savings.

(As with all insurance schemes some terms and conditions apply. These are explained under Insurance Schemes).

Secondly, the savings, which each member holds, enables us to advance loans both to them and other members.

 

Changes to Tax Position on Savings Accounts – Budget 2014

Share Accounts

Up until 31st December 2013, there were options as to how members could treat their Share Accounts for tax purposes. Some members held “Regular Share Accounts”. On these accounts no DIRT was deducted from dividends paid and members dealt with their tax liability (if any) directly with the Revenue Authorities. Another option was to hold a “Special Share Account” from which DIRT was deducted from dividends by the Credit Union and paid directly to the Revenue authorities on their behalf. A third option was to hold a 3 or 5 year (Special Term Share A/C) which gave tax exemptions on dividend up to €480 or €635 respectively.

From 1st January 2014, these options no longer exist. ALL dividends paid to members are fully liable to DIRT at the prevailing rate (now 39%).

Deposit Accounts

Prior to 1st January 2014, tax efficient Deposit Account savings accounts were available as 3 or 5 year “Special Term Deposit Accounts”. These accounts carried a DIRT exemption on the first €480, or €635, of interest paid on savings. These have also been removed for 2014 onwards. We are currently designing alternative accounts for members who hold this type of account.

Summary of Main Features of Savings Accounts

Shares Accounts
Account / Product Availability of Funds Tax Treatment Return Insurance Benefits
Special Shares On Demand – Subject to loans. DIRT at 39% deducted from Dividend. – No further tax liability in the hands of member. Dividend – not guaranteed – paid once per year in December. Yes – up to €12,700 maximum across all share accounts and age of member when savings made.

Maximum level of shares in a Share account – €30,000

Deposit Accounts
Account / Product Availability of Funds Tax Treatment Return Insurance Benefits
Super Saver Easy Access A/C Available on demand. Dirt at 39% deducted from Interest Earned. See “What do I earn on my Savings”. None
6 Month Fixed Term Account Locked in for 6 months from opening of account. Dirt at 39% deducted from Interest Earned. See “What do I earn on my Savings”. None
12 Month Fixed Term Account Locked in for 12 months from opening of account. Dirt at 39% deducted from Interest Earned. See “What do I earn on my Savings”. None

Maximum level of deposits across all accounts – €75,000

Maximum level of deposits in individual accounts – €25,000

Please note that this is a summary of the main features only. Please enquire at the office for full details of the Terms & Conditions applying.

Which Account Is Best For Me?

This is a question to which there is no simple answer. In practice many Members hold more than one type of account to meet different needs. As a guide, however, the following may be helpful. Please note that this is intended merely as a simple guide and we recommend that you talk to one of our staff to work out the best plan to suit your needs.

The most important thing for me is to have insurance benefits and to be able to borrow when I need to. Share Accounts may be the most suitable for you.
The most important thing for me is to be certain of what my savings will earn and get it more frequently than once per year. Deposit Accounts may be the most suitable for you.

 

Some Final Points
  • Please note that evidence of your identity (name, date of birth, address and PPS number) is required when opening a new savings account (shares or deposits). The documents that are acceptable to verify your identity can be seen on the ‘How to Join’ section of the website. The documents to verify your name, date of birth and PPSN will be required only once (first time you request a new deposit account) but you will be required to verify your address every 5 years unless you change address in the meantime.
  • DIRT (Deposit Interest Retention Tax) must be deducted from interest paid on deposit accounts in most cases. The current rate is 39%. The exception to this is if you are exempt from DIRT.
  • A person eligible to be exempt from DIRT if they or their spouse, are over 65 years of age and have an income less than €18,000 (in the case of a single person) or €36,000 (in the case of a married couple) in the current tax year. Please enquire at any of the 3 offices.