Capital Credit FAQs

For a telephone cooperative, Capital Credits are the amount of money left over at the end of a business year once all the operating expenses have been paid (generally referred to as profits in a private company). This remaining money is allocated separately to each member of the cooperative in proportion to the total amount of goods and services purchased by the member for that year. In other words, members get a percentage of the profits credited to them and the more services and goods that they have purchased means a greater share of the capital credits. Members begin accumulating capital credits with their first purchase of services and goods from NCTC.

Capital Credits are just one of the many benefits of your NCTC membership because private telephone and internet companies do not make capital credit payments to their customers.

An allocation is a determination of each member’s share of NCTC’s profits for a given year. These profits are allocated or assigned to members in proportion to the total amount of goods and services purchased by the member for that calendar year. NCTC keeps a permanent record of these allocations on what is called a capital credit account for each member, which is where the allocated amount remains until it is paid to the member. This process is called a “retirement of capital credits”.

A retirement of capital credits occurs when NCTC pays a member a certain portion of that member’s capital credit account. The Board of Directors annually reviews the financial criteria of NCTC and various legal requirements and determines if it is appropriate to retire capital credits. Likewise, the Board must determine the years for which capital credits are being retired as well as the amount of capital credits to be retired. These decisions are also based upon various financial criteria that measures the financial soundness of NCTC.

NCTC is retiring and paying capital credit allocations for 1990. If you were a member during that time period, you will receive a check payment unless your amount of capital credits at that time falls below the minimum distribution amount. NCTC will distribute the funds totaling $1,185,797 in August of 2023.

Capital Credit checks will be issued for amounts greater than or equal to $25.00. Any member who holds an unretired amount less than $25.00 will be paid out upon the next distribution of capital credit payments if they meet the minimum threshold.

General retirement of capital credits is paid in chronological order. Capital Credits allocated after 1990 will remain in the members’ capital credit accounts. Each year that the Board determines that it is financially sound for capital credits to be paid, those payments will be made for the next calendar year which would be 1991.

The administrator of the estate should report the death to the business office by calling (615) 666-2151. Likewise, they should provide contact information including a good mailing address for future capital credit payments. In case of a joint membership where a spouse has passed, a change in the membership name by the surviving spouse must be made to ensure future capital credits can be paid to the surviving spouse/member.

If you have moved out of the NCTC service area or NCTC does not have on file your current address, it is likely that a check was not mailed to you, and you would have an unclaimed capital credit. Capital credits that are unclaimed are paid to the State of Tennessee by law as unclaimed property. NCTC wants all of its members to receive their payments. Please visit our Unclaimed Capital Credits page to view a published list of unclaimed capital credits. If you have an unclaimed capital credit, please notify NCTC with a current mailing address.

If you have questions about Capital Credits, please contact us at any time!