Why is DUCA selling Class B Investment Shares, Series 4?
The purpose of this offering is to add to DUCA’s Regulatory Capital in order to provide for the future growth, development and stability of the credit union.
What is the difference between Membership Shares and Investment Shares?
The difference between Membership Shares and Investment Shares is that Membership Shares must be purchased in order to become a Member of DUCA, while Investment Shares are an optional investment opportunity for DUCA Members.
How can I purchase DUCA’s Investment Shares?
You can buy Investment Shares at any DUCA branch or by calling 1.866.900.3822. Investment Shares will be available for purchase for 6 months, until the maximum number of Investment Shares for sale in this Offering is sold, or until the Board decides to close the Offering.
Why would I buy Investment Shares instead of a Term Deposit?
Given that 5-Year, Non-Redeemable Term Deposits renewed today1 will yield 2.60% annually, the rate premium takes into account that Investment Shares similar terms and conditions as DUCA’s current Bonus Shares, but are different from Term Deposits in guarantees, deposit insurance and redemption.
How do I redeem Investment Shares?
Shares will be redeemable 5 years or more after the Issue Date. Redemption requests will be approved monthly by the Board of Directors on a first come, first serve basis, as no more than 10% of the total Class B Investment Shares, Series 4 outstanding at the end of the prior fiscal year may be redeemed in any fiscal year. DUCA also has the option of redeeming all or a portion of Investment Shares 5 years or more after the Issue Date.
Can I redeem a term deposit (GIC) that is currently invested in a fixed term in order to purchase Investment Shares?
Yes, DUCA will provide Term Deposit investors with an opportunity to transfer any portion of their existing deposits into Investment Shares hassle-free and at no additional cost even if the transfer occurs prior to the Term Deposit’s maturity date.
How are dividends paid?
Dividends will be paid in cash, in additional Class B Investment Shares, Series 4, or in a combination of both.
Will the dividend always be at 4.25%?
Over the years, DUCA has consistently paid an annual dividend to its Members. However, there can be no guarantee that a dividend will be paid each year. Dividends depend on DUCA’s profitability. If and when the Board declares a dividend in any year, the dividend will be not less than 4.25%. Past payments of dividends in no way predict the certainty of future dividend payments.
How are the cash dividends of the Investment Shares treated for income tax purposes?
The dividend is taxable as interest income, but is RSP, RIF, and TFSA eligible. That means the Investment Shares can make an excellent addition to your registered portfolio and help you in constructing your tax planning strategies.
Can Investment Shares be held in a Locked-In Retirement Account (LIRA) or a Life Income Fund (LIF)?
No, they cannot be held in a LIRA or a LIF.
Are Investment Shares covered by Deposit Insurance Corporation of Ontario (DICO)?
Investment Shares are not insured under DICO or any other form of guarantee of principal or dividends, and are not secured by any assets of the credit union.
Can non-Members purchase these Investment Shares?
No. The Class B Investment Shares, Series 4 are offered to Members only. However, non-Members are welcome to apply for a DUCA membership. Membership requires the purchase of one DUCA Membership Share (cost $1.00), which provides Members with access to all of DUCA’s products and services as well as voting privileges at Membership meetings. Non-Members are encouraged to either visit a DUCA branch or call 1.866.900.3822 to become a Member.
* Minimum dividend rate is 4.25% annually for five years if dividends are declared. Declaration of dividends is not guaranteed. Dividends are non-cumulative. The Class B Investment Shares, Series 4 may not be redeemed until five years or more after the Issue Date. The Class B Investment Shares, Series 4 are not deposits and are not insured by the Deposit Insurance Corporation of Ontario. Class B Investment Shares, Series 4 are available only by Offering Statement. This is not an Offering Statement. Review Offering Statement for full details prior to purchase. Offer available only to DUCA Members. To become a Member and participate in this Offer, call 1.866.900.3822 or visit a DUCA branch.
1 Rate as at July 16, 2019.
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