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A Certificate of Participation (COP) is a time deposit very similar to a Certificate of Deposit (CD). The investment is made for one, two or three years with a penalty for early withdrawal. The rate of interest is set by the investment committee and remains fixed for the full term (until maturity).

Investments in COPs are combined to form a pool of funds used for loans to United Methodist churches and agencies. Interest income may be paid annually or semi-annually. With a deposit of $10,000 or more, interest may be paid as frequently as monthly. Details are provided in the Offering Circular. The circular and COP application may be found on the Forms page.

COP Rates October 2018 APY
1 Year Term 1.25% 1.26%
2 Year Term 1.50% 1.51%
3 Year Term 1.95% 1.97%

COPs are appropriate for investors who:

  • Are seeking higher yields than money market rates
  • Are able to make a one, two or three year time deposit (penalties exist for early withdrawal)
  • Seek to invest in loans made to United Methodist churches and agencies
Frequently Asked Questions (FAQs)

What are the terms of the Certificate of Participation?

The Foundation issues one-, two- and three-year Certificates of Participation with a minimum investment of $1,000 that earn investors a competitive rate of interest.

When do investors receive their interest?

Investors receive their interest either semi-annually or annually at maturity. The amounts are prorated if they have been deposited for less than six months. With a deposit of $10,000 or more, an investor can receive automatic interest payments as frequently as monthly.

Can investors choose to reinvest as their Certificates of Participation mature?

Yes. Approximately 30 days prior to the maturity date an investor will receive a renewal notification letter. The default option is to reinvest the interest due and renew the certificate for another term.

How is the rate of interest for Certificates of Participation established by the Foundation?

The Foundation’s Board of Trustees has authorized the Investment Committee to set the rate at the beginning of each month. Factors that determine the interest rate paid to investors include the interest rate earned from current loans, market conditions and rates of similar investments. The investor receives a fixed rate for the full year.

How secure is an investment in a Certificate of Participation?

The Foundation is an agency of The United Methodist Church and its investments are not insured like bank deposits or CDs. Under strict guidelines, investment funds are loaned to United Methodist churches and institutions in the Texas Conference and secured by first mortgages on property and buildings. A liquid reserve equal to 5 percent of all investments is maintained at all times.

What about early withdrawal?

Certificates of Participation are time deposits and are designed to be left on deposit for the full term. Withdrawals are possible before maturity, but with a penalty. In the first year, the early withdrawal penalty is six months’ interest. For investors who have had funds in place for more than a year, the penalty is three months’ interest.

Is the interest paid on my COP investment taxable income?

The interest paid is ordinary income and is taxable just like interest from any other taxable investment.

Is there a charitable tax deduction for investing in a Certificate of Participation?

No. Charitable deductions are not permitted for investments in Certificates of Participation.

Can a husband and wife invest as joint owners of a Certificate of Participation?

Yes. They may invest as joint owners with rights of survivorship.

Can I invest in a Certificate of Participation as an IRA?

At the current time, IRAs are not available through a Certificate of Participation investment.

How is the offering of Certificates of Participation made?

The offering is made by the Offering Circular (found on the Forms page) and is limited to individuals associated with the United Methodist Church in the state of Texas.

How do I receive an Offering Circular?

You may download a printable PDF copy of the Offering Circular and application on the Forms page. Otherwise, you may contact us to request a hard copy to be mailed to you.

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