Investment shares are a unique investment opportunity for members.
THIS CONTENT IS SPONSORED BY FIRSTONTARIO CREDIT UNION
FirstOntario Credit Union is a full-service financial institution that has been serving its members for more than 80 years throughout the Hamilton, Halton, Niagara and southwest regions of Ontario. FirstOntario is one of Ontario’s largest credit unions, with assets of close to $6 billion.
Everyone is welcome to be part of FirstOntario for financial services including daily transactions, mortgages, lines of credit, loans and investments. FirstOntario profits are invested into the communities they serve.
FirstOntario recently launched its 2023 investment shares, which allows its members to purchase shares in the Credit Union. The target annual dividend payout on those shares is six per cent.
Mark Perkins, the chief operating officer of FirstOntario, shared some details on the investment opportunity being offered by an organization that has always been proud of its Hamilton roots.
Why is FirstOntario offering this investment share opportunity?
Investment Shares give our members the unique opportunity to invest in the ongoing success of FirstOntario Credit Union. The capital raised helps support the sustainable long-term growth of the credit union, enabling FirstOntario to invest in new products, services, and ongoing digital transformation to meet the growing needs of our current and future members.
What makes this particular investment different from other offerings of FirstOntario? Is this the first investment shares of its kind for FirstOntario?
We have offered what we refer to as Class B shares in the past, the last time being in 2015.
Investment shares offer the opportunity to earn a higher return, while strengthening the credit union and investing into the community. It’s a uniquely credit union way members can invest directly in the long-term success of our credit union.
What is the difference between membership shares and investment shares?
Membership shares must be purchased in order to become a member of FirstOntario and enjoy the rights and benefits of being a member. Investment shares are an opportunity for FirstOntario members to support their local Credit Union and participate in the potential profits generated by the ongoing business activities
How do people make this investment and is it the type of investment geared more for a new investor or a seasoned investor or both?
To purchase these shares a person must be a FirstOntario member. To become a member or purchase the shares, you can contact your local FirstOntario branch or call 1-800-616-8878.
This investment is geared towards anyone who has a time horizon of five years or longer, both young and old alike, whether a first-time investor or a seasoned investor. It can be purchased as part of a registered or unregistered plan.
What is the redemption period and how do investors redeem their shares? Can they be redeemed before five years?
During the initial five-year period the shares cannot be redeemed. They can only be redeemed prior to the five-year period if the member passes away or, in certain circumstances, otherwise involuntarily leaves the credit union.
Is this something unique to FirstOntario or do other credit unions offer similar investment opportunities?
Other credit unions have also offered investment shares.
Do the banks offer similar investment opportunities or is this something exclusive to credit unions?
Credit unions are owned by their members, so only members can purchase investment shares. Since banks are publicly traded companies, their shares are acquired on the stock exchange.
What is the dividend that will be paid on this new investment share series?
The target annual dividend rate is six per cent. FirstOntario’s board must approve the dividend payment annually based on the credit union’s performance over that fiscal year. The decision considers profits, liquidity, and operational and regulatory requirements. Dividend payments are not guaranteed. FirstOntario has consistently paid the annual dividend on all its existing Investment Share Series, but past payment of dividends is no guarantee that dividends will be paid in the future or at any particular rate.
Is the dividend payment guaranteed?
The dividend target is six per cent, but it is not guaranteed. FirstOntario has consistently paid the annual dividend on all its existing Investment Share Series, but past payment of dividends is no guarantee that dividends will be paid in the future or at any particular rate.
How long will the shares be available?
The investment shares are available now and can be purchased until Oct. 19, 2023.
How is the return on investment shares treated for income tax purposes?
The return on Investment Shares needs to be reported as interest income, even though a return on this shares series is legally a dividend. The Canada Revenue Agency requires that the dividends on Investment Shares (held outside of registered products) are considered interest income for tax purposes. Please consult your tax advisor for further information.
Where can people find more information about these shares?
Anyone interested can contact their local FirstOntario branch or call 1-800-616-8878. They can also visit Investment Shares | FirstOntario Credit Union for more information.