Simply put, a dividend is a share of profits from a company paid to someone of some company.
For many, dividends come from stocks and investments.
For a credit union member, like First Choice Federal Credit Union, dividends are paid based on the amount of funds you have saved in your account(s). This amount gives us a percentage of assets, and your dividends are given accordingly.
There are three types of dividends that exist:
- Cash dividend – cash payment based on a percentage of the company owned
- Stock dividend – stock is paid instead of cash based on a percentage of the company owned
- Extraordinary dividend – board of directors distributes cash previous held back to shareholders