Share Cap FAQs

Information on changes to our savings cap.
The savings cap at Aviate Credit Union is currently set at €40,000.

Q. Why is The Credit Union limiting/imposing a savings cap?
The Board took the decision, like a large number of other credit unions in the country, to impose a new savings limit per member. Our savings limit is €40,000.

The reduction is in response to a sustained period of low interest rates imposed by the European Central Bank.

Domestically the Central Bank of Ireland mandates that all credit unions in the country maintain a regulatory reserve of a minimum of 10% of their total assets. This means that for every additional €100,000 of savings, we must allocate €10,000 from our surplus / profits to our Capital Reserve, and this can have the effect of depleting the amount available to pay a dividend or interest rebate at year end and how much we can lend.

We also face the challenge of a low interest rate environment which has greatly reduced the investment income the Credit Union earns. Additionally, due to the high level of on-demand savings held by the credit union, excess funds must be placed in investments from which we’re receiving very low or zero interest rates. We’re also charged by the banks on our current accounts. Therefore, the low interest rate environment is also impacting on our ability to maintain our surplus at current levels.

Q. What is the saving restriction/cap?
There is a saving restriction of €40,000 per member account. This means that from that date forward each member can only have €40,000 in total between their shares, deposits, budget a/c and other balances.

If a member has over that amount in savings, we will contact them to make arrangements to reduce the excess to bring them to the €40,000 limit.

The impact of the savings cap means that in certain situations, members will need to reduce their savings contribution or cease contributions through payroll or direct debits. We will instruct relevant Payroll Departments or your bank of this.

Members who have less than €40,000 will be able to increase their total savings to €40,000 - but cannot exceed it.

Q. How long will the cap last for?
The Board of Directors will keep the savings cap under constant review, if they make any decision to change the cap, all members will be informed.

Q. Does this mean the credit union is in difficulty?
No, this has no bearing on the day-to-day operations of the credit union. In fact, this decision will reinforce and strengthen the credit union even further.
This decision has been made to mitigate any potential cost increases which could result from excess savings.
The intended purpose of the introduction of this savings cap is to prevent a drag on the surplus in the coming years.