Available for a limited time only!

For a limited time, Capital City Savings is offering Series B Investment Shares. Investment Shares give you the potential to earn a high yield on your investment, as well as make a valuable long-term investment in your local community. Capital City Savings Series B Investment Shares are also RRSP and RRIF eligible, so they are an attractive way to maximize your long-range financial goals while minimizing your overall tax liability.

This information will answer many of the questions you may have about Capital City Savings Series B Investment Shares. If you are interested in purchasing investment shares, read the Disclosure Statement available in all branches.

What are Capital City Savings Investment Shares?

Investment Shares represent equity or capital in the credit union. The more capital a credit union has, the more secure it is, and it is our intention to ensure that Capital City Savings is as secure as possible.

It is important to note that Investment Shares represent an equity investment in the credit union. Unlike term deposits which are 100% guaranteed by the Credit Union Deposit Guarantee Corporation, Series B Investment Shares are not guaranteed. The Investment Share risk, however, is balanced by the strong performance of Capital City Savings.

Series B Investment Shares have a preferred position in the distribution of the credit union's assets, ranking only behind depositors in their claim on the credit union's assets.

Why is Capital City Savings offering Investment Shares?

Credit unions can raise capital in a number of ways. A number of credit unions in other provinces have raised capital by issuing Investment Shares and Capital City Savings offered their first series of Investment Shares in 1996. Capital City Savings is issuing Series B Investment Shares to ensure it exceeds the capital requirements as set out in the Credit Union Act.

Through the purchase of Series B Investment Shares, members are not only investing in, but also contributing to the future growth and strength of Capital City Savings, while earning an attractive yield on their investment at the same time.

Who should consider Capital City Savings Investment Shares?

Capital City Savings Series B Investment Shares are better suited to individuals looking for a higher yielding, long-term investment to diversify their investment/retirement planning portfolio.

Capital City Savings Series B Investment Shares are NOT intended as a short-term savings plan, such as savings for a down-payment on a house or buying a new car.

What do the Series B Investment Shares cost?

Capital City Savings Series B Investment Shares are being sold at a price of $1.00 per share.

What kind of return will I make on Capital City Savings Series B Investment Shares?

Capital City Savings' dividend policy on Series B Investment Shares is to pay a dividend of 6% in the first year, 6 1/2% in the second year, and 7% in the third year. After that the policy is to pay a dividend equal to Capital City Savings' average five year term deposit rate plus 2% for the year. Dividends will be paid as additional Series B Investment Shares, not as cash, and are non-cumulative (if a dividend payment is not declared it will not be made up at a later date).

How and when are dividends paid on Capital City Savings Investment Shares?

Dividends are compounded and paid annually on December 15 into the Series B Investment Share Account.

Dividends are paid in the form of additional shares, not cash. Dividends are non-cumulative: if a dividend is not declared and paid during one fiscal year, it will not be carried forward or added to the next year's dividend.

Dividends are only earned from the date the shares are issued. This means if you own the Investment Shares for less than a year when the dividend is declared, you will receive less than a full year's dividend.

Can Capital City Savings Series B Investment Shares be cashed in at any time?

Investment Shares are meant to provide longer term stable capital for the credit union. As a result, the shares may not be withdrawn on demand. Capital City Savings' redemption policy for Series B Investment Shares allows members to redeem their shares once a year (December 20), up to a maximum of 10% of the total number of Series B Investment Shares outstanding for the whole credit union.

Series B Investment Shares held in a RRIF may be redeemed at the minimum rate set out under the Tax Act and they may be redeemed 100% in the event of the death of the holder.

Series B Investment Shares will be redeemed by Capital City Savings at a price of $1.00 per share, therefore, no capital gain or loss will result from the redemption of Investment Shares.

If the Series B Investment Shares are redeemed prior to a dividend declaration date, the shares redeemed will not be eligible for any dividend paid later that year. If the shares are redeemed after a dividend declaration date, dividends declared but not paid will be paid on the redemption date.

Is there any risk attached to Capital City Savings Series B Investment Shares?

Like all share offerings, Capital City Savings Series B Investment Shares are not covered by deposit insurance. To understand all risks associated with this investment, please read the Disclosure Statement available at all branches.

How many Series B Investment Shares are Capital City Savings selling and how long will they be available for purchase?

Capital City Savings is issuing up to 20 million Series B Investment Shares. The shares will only be offered between January 15, 2003 and July 15, 2003. Once all of the shares are sold, or after July 15, 2003, this offer closes. Capital City Savings may offer another limited issue of Investment Shares in the future, but no such plans are in place at this time.

Are there any fees associated with purchasing or redeeming Capital City Savings Series B Investment Shares?

No.

Who can buy Capital City Savings Series B Investment Shares?

Only members of Capital City Savings, 18 years or older, or a person acting on behalf of a member, may purchase Capital City Savings Series B Investment Shares.

What are the minimum and maximum investment requirements?

A minimum investment of 1,000 shares ($1,000) is required. A maximum purchase of 100,000 shares ($100,000) has been established for each member, regardless of the number of accounts held with Capital City Savings.

Can a husband and wife each buy 100,000 shares?

Yes, as long as each of them is a Capital City Savings member.

Will Capital City Savings lend money to members to purchase shares?

No. Regulations set out in the Credit Union Act prohibit credit unions from lending money for the purchase of credit union equity shares such as Capital City Savings Series B Investment Shares.

Are Capital City Savings Investment Shares RRSP eligible?

Yes. Series B Investment Shares may be held in an RRSP or RRIF. In fact, since Capital City Savings Investment Shares are intended to be a longer term investment, paying an attractive dividend, they are ideal for RRSPs.

What are the income tax implications of Investment Shares?

Dividends earned from Capital City Savings Series B Investment Shares must be declared as interest income on the investor's tax return. If the Series B Investment Shares are held in an RRSP or RRIF, the dividends enjoy the same tax treatment as interest income from other RRSP/RRIF investments. If you hold the Investment Shares outside a registered plan, you may incur a tax obligation since the dividend is paid in the form of additional Series B Investment Shares.

Can I sell my Series B Investment Shares after I purchase them?

The credit union will maintain a list of prospective purchasers and sellers which will be used to assist members who wish to purchase or sell their Investment Shares. At no time will Capital City Savings take ownership of the Series B Investment Shares.

How do I purchase Capital City Savings Series B Investment Shares?

Capital City Savings Series B Investment Shares are sold by Disclosure Statement, which means you must review the Disclosure Statement before purchasing in order to ensure your understanding of the investment.

Capital City Savings Series B Investment Shares can be purchased by visiting your nearest Capital City Savings branch. Every branch has representatives who are fully qualified to answer any questions you may have and who will provide you with a copy of the Capital City Savings Series B Investment Share Disclosure Statement.

Please feel free to also contact us by email should you have further questions or concerns.