Common use of Nature of Dividends Clause in Contracts

Nature of Dividends. Dividends are paid from current income and available earnings after required transfers to reserves at the end of the dividend period. Dividend Compounding and Crediting – The compounding and crediting frequency of dividends and dividend period applicable to each account are stated in the Credit Union’s Truth-In-Savings Rate Schedule. The Dividend Period is the period of time at the end of which an account earns dividend credit. The Dividend Period begins on the first calendar day of the period and ends on the last calendar day of the period. Accrual of Dividends - Dividends will begin to accrue on the business day we receive provisional credit for the deposit of noncash items (e.g. checks) to your account. Dividends will begin to accrue on cash deposits on the business day you make the deposit to your account. Balance Information - Any minimum deposit to open an account and the minimum average daily balance you must maintain to avoid service fees and to earn the annual percentage yield stated for your account is set forth in the Credit Union’s Truth-In-Savings Rate Schedule. − Average Daily Balance Method. For share draft (checking), club account (savings), and IRA savings account, dividends and minimum balances are calculated by the Average Daily Balance Method, which is determined by adding the full amount of principal to the account for each day of the period and dividing that figure by the number of days in that period.