Dividends at Knoxville Teachers Federal Credit Union are earned on a day-in-day-out basis and paid quarterly. The dividend rate of all share accounts is set at the end of the affected quarter. This method of dividend calculation is beneficial to the members in that it allows the use of hindsight (which is always 20-20) to determine the most appropriate rate to be paid. Institutions which set the rate in advance must guess what the economy is going to do during the period and then build in a “cushion” to protect them if they guessed too high. The result of that method is a rate that is nearly always lower than it could have been.
A word about our rate structure: KTFCU pays dividends (interest) using a tiered method. That is, funds on deposit below $5,000 earn the base rate, funds from $5,000.01 to $50,000 earn the enhanced rate, and funds on deposit in excess of $50,000.01 earn a premium rate. For example, an account with $70,000 on deposit would earn the base rate on $5,000, the enhanced rate for the next $45,000 and the premium rate on their top $10,000 for every day of the quarter they were on deposit. See the home page for the rates for the most recent quarter.
The credit union has maintained a superior rate of return. Remember, these rates are paid with no risk of penalty to you should you need to use your money!
Complete Truth in Savings disclosures are available at any of our locations or by clicking here.
Sometimes we get questions about share insurance. Because of what is so commonly in the news, the question is usually “Are you insured by FDIC?” No, we are insured by National Credit Union Administration, an agency of the Federal government very similar to FDIC, but one that is designed to insure only credit unions. If you want to know more about NCUA, visit the NCUA site by clicking here. You may also download a .pdf copy of the NCUA brochure titled “Your Insured Funds” from their site that does an excellent job of describing how the deposit insurance coverage works and ways to maximize it.
By the way, if you ignore all the good reasons to put your savings here and buy U. S. Savings Bonds instead, you can check current yields and purchase them online by visiting the U.S. Treasury’s site.