Please explain this to me like I am 5…
Local Credit Union has savings accounts with Dividends in addition to APY. Says dividends are close to 5% for under $10k and only .01% for above $10k…
What is a dividend? How much would an account with $10k get in dividends per year? And why would they offer a higher dividend for storing less money?
This is genuinely all gibberish to me.
🙁
Savings Account – Dividends ???
byu/APartOfWhoIAm inpersonalfinance
Posted by APartOfWhoIAm
2 Comments
Whenever you see the word “dividend” in the context of deposit accounts at a credit union, replace that word with “interest”. That’s all.
>Local Credit Union has savings accounts with Dividends in addition to APY.
No.
>Says dividends are close to 5% for under $10k and only .01% for above $10k…
>How much would an account with $10k get in dividends per year?
$10000 * 5% = $500 after the first year
$10000 * 5% + $500 * 0.01% = $10500.05 after the 2nd year
>why would they offer a higher dividend for storing less money?
It’s a gimmick.
It’s especially gibberish because they are using wired terminology.
It’s a gimmicky promodeal to get new customers. Large accounts don’t earn as much interest but some people will get roped in by that 5% figure