Personal Finance, Coop | Pays a record sum to 1.9 million Norwegians: Asks people to check the account

(The online newspaper) The purchase dividend for 2021 is these days ticking into the member account of all the members, who are also their co-owners.

On average, each Coop member is paid a purchase dividend of NOK 726.

In total, the grocery chain will pay close to NOK 1.3 billion in dividends for 2021, just over nine million more than for 2020. This means a new record.

In addition, during 2021, members received coupon and membership discounts totaling more than NOK 1 billion, which gives a total membership dividend of NOK 2.5 billion for 2021, which is a record amount. For 2020, on the other hand, the total sum was NOK 2.4 billion.

– I am pleased that we can share such a large amount with our customers who own us. Last year was marked by the pandemic and high turnover in many of our stores. This contributes to a high purchase dividend, in addition to more and more people using discounts and other membership benefits, says Geir Inge Stokke, CEO of Coop Norge SA.

Therefore, Coop now asks customers to check the account.

– Move the money

If you leave the money in your member account, you get an interest rate of 0.25 percent in most cooperatives, but it will vary somewhat. However, you get a higher interest rate if you put the money in Coop’s high interest rate account.

In Coop Øst, the interest rate is 0.25 per cent, but if you put the money in a high-interest account, you get 0.6 per cent if the amount is up to NOK 100,000.

Master of Business Administration Hallgeir Kvadsheim, known from, among others, Luksusfellen, has one clear piece of advice if you leave the money in the Coop account:

– Move the money from the member account to the high interest rate account, he says to Nettavisen.

– 0.25 percent are shattered, but from 0.6 percent we start talking. It is far better than many major banks achieve, even though it is somewhat below the niche track banks’ offerings, Kvadsheim continues.

He encourages Coop members to leave the money in the Coop account if you are struggling to save a buffer account on your own.

– You use the Coop account as a “hidden” money buffer. Ok, it may not be that much there after just one or two years, but it builds up over time. This speaks in favor of leaving the money with Coop, he says.

Encourages fund savings

If you already have a buffer account from before, and strictly speaking do not need the money, Kvadsheim encourages you to put the money into an index fund.

– The expected return is much higher than on Coop’s member account. It is also a form of “invisible” savings, which you will probably be very happy when you withdraw the money from the fund in 10-20 years, says Kvadsheim.

Harald Kristiansen, Head of Communications at Coop Norge, knows that many people use encouragement to put the money from, for example, Coop’s purchase dividends into funds.

– I recommend the members to look at our interest rate conditions against their banks, and the risks of funds and what the annual expenses of the fund are. If the washing machine smokes and you need extra money, you will immediately get the money you have at Coop, he says.

Important for customers

Coop currently has 1.9 million members, but Stokke says that during 2022 they will pass a total of two million members in all Coop’s cooperatives.

In 2021, the chain gained over 116,000 new members, who are also co-owners, and of these, 38 percent were under 30 years of age, and over 60 percent are under 40 years of age.

– We have another year of high membership growth, so this tells us that purchase dividends and other membership benefits are important to customers. Customer surveys also show that members greatly appreciate saving through purchase dividends, on coupons and good membership bargains, says Stokke.

– Why do you pay the purchase dividend once a year, unlike your competitors? Rema’s members get the discount when trading and the Trump members in Norgesgruppen’s stores can withdraw the money from the account throughout the year.

– Coop is different in that the customers are actually our co-owners. The purchase dividend is your share of the profit, as in a limited company, and is paid once a year. Then the purchase dividend is deposited in your savings account. In contrast to Æ and Trumf, members of Coop receive a deposit interest on the money in the member account, says Stokke.

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