At the heart of the matter is the calculation and rounding the system uses. As we state in our documentation, we calculate to 8 decimal positions and half round up in the fourth. We warrant this math and it has not changed since 2006. What that means is that the member must have accrued at least 5 ten thousanths of a penny before we will begin accumulating the amount. In the case of a member who has more than the minimum balance to earn a dividend but less than the amount to actually accumulate a dividend, they will not be paid a dividend. There is only one section of TIS which addresses permissible rounding and that section is listed below. This is the exact way we round in our calculation.
Also, the regulation does not state that if the credit union discloses a minimum to pay dividends that the credit union must pay a dividend. In the event the credit union feels they should pay dividends in these situations we recommend you change your product to use the average daily balance calculation method instead.
(f) Rounding and Accuracy Rules for Rates and Yields (from official staff commentary)
(f)(1) Rounding
1. Permissible rounding. The annual percentage yield, annual percentage yield earned and dividend rate must be rounded to the nearest one-hundredth of one percentage point (.01%) when disclosed. Examples of permissible rounding are an annual percentage yield calculated to be 5.644%, rounded down and shown as 5.64%; 5.645% would be rounded up and disclosed as 5.65%. For account disclosures, the dividend rate may be expressed to more than two decimal places.
Source: Staff commentary section of NCUA Regulation 707