MEMBER INVESTMENTS








Investment Types

Short Term Demand Investment

The maximum amount to be invested by an individual member is $300,000. These investments are "unsecured". When these funds are borrowed from the members, a Short Term Demand Member Loan Receipt is completed and signed by the member and an authorized Co-operative officer. This receipt stipulates the loan is repayable on demand. Interest is calculated monthly, taking into account daily all new loans and repayments during the month, at a rate determined monthly by the Board of Directors. Interest is paid monthly by crediting the Short Term Demand Member Investment balance. A monthly statement is mailed to the member showing previous monthly balance, plus additional funds invested, plus interest added, less any amount of the investment repaid.



Annual Term Investment

At Hensall Co-op, Long Term Member Investments are called "Special Member Investments". Special Member Investments are issued for two, three, four, five, seven or ten years and are "unsecured". They are not a requirement for membership. Interest rates are usually higher than Guaranteed Investment Certificate rates. Interest is paid or compounded on April 1st of each year. All Special Member Investments mature on March 31st in the year the term expires. Special Member Investments have certificates issued which are signed by the President and Secretary of the Board of Directors and authenticated with the Co-operative Corporate Seal.



Monthly Term Investment

For anyone desiring monthly interest income, you may wish to consider this option from Hensall Co-op. Minimum investment is $10,000.



Equity Investment

At Hensall Co-op, Long Term Member Investments are called "Special Member Investments" which are issued for two, three, four, five, seven or ten years and are "unsecured". They are not a requirement for membership. Interest rates are usually higher than Guaranteed Investment Certificate rates. Interest is paid or compounded on April 1st of each year. All Special Member Investments mature on March 31st in the year the term expires. Special Member Investments have certificates issued which are signed by the President and Secretary of the Board of Directors and authenticated with the Co-operative Corporate Seal.





a) Patronage Dividend Investments
Patronage Dividends are created when the Co-op has had a successful year and the Board of Directors decides to declare Patronage on business transacted by the member/owner. When dividends are declared, they are not immediately paid out in cash. As a result, the retained dividends become a source of equity for the Co-op.


The Patronage Dividend Investment occurs from:

  • Add - Patronage Dividend declared amount, less 15% federal tax withheld and remitted by the Co-op to the Federal Government on Patronage Dividends of over $100.
  • Less - amounts transferred to the Mandatory Member Investment as required by the Board of Directors and
  • Less - any repayment in cash of the Patronage Investment

Members must first have $500 in the Mandatory Member Investment before repayment of 10% of the declining Patronage Dividend balance occurs.


After the first $500 Mandatory Member Investment is satisfied, one half of the 10% Patronage Dividend repayment, in increments of $50, is transferred to the member's Mandatory Member Investment and the other half is paid in cash on each December 1st.


The 10% repayment policy is in effect at the present time, but can be changed by resolution of the Board. No interest is paid on Patronage Dividends that have not been repaid.






b) Mandatory Member Investments
Funds transferred from Patronage Dividends are usually obtained from the transfer of patronage declared in increments of $50 in the manner described in the previous section. It may also be paid in cash voluntarily by the member. Annual interest rate is 5% and interest is paid yearly on December 1st. However, if the Co-op has a profitable year, directors can, at their discretion, pay a bonus over the 5% minimum interest rate. As an example, directors have authorized a 2.5% bonus over the 5% rate following the 1998 fiscal year. These investments are "unsecured". No maturity date is given on the Mandatory Member Investment. Upon death, the member's estate can request a repayment of this investment. Also, if the member sells his farm assets, or moves from the area, the member can request a repayment of the investment.


No certificates are issued for these amounts; however, each year on December 1st, a detailed report is prepared for the member showing last year's balance of the Mandatory Investment, plus transfers of Patronage Dividends or Voluntary Additions to the Mandatory Investment.