Credit union members reap these benefits during any strong financial years their credit union may experience. They give back to their members through lower rates and cash bonuses any leftover money in the budget, either at the end of the year or a certain quarter. As for where the money comes from, it's surplus cash that results from investments and loan revenue. Credit unions that meet their targets for building financial reserves can choose ways to reward members with improved pricing.
Some credit unions offer slightly lower loan rates and modestly higher savings rates.
Others offer bonus dividends or interest rebates. With that approach, the credit union can pay an extra dividend to savers at the end of the year or calendar quarter, or refund some of the interest that borrowers paid. If the credit union falls behind with its financial goals for the year, it can skip the bonus pay. The latest reward consisted of the total interest a member earned on deposit accounts throughout the year and the total interest paid on loans. The bonus was applied to the member's savings account last December.