Credit Union Savings Accounts: Interest Rates, Fees, And Benefits

Saving money is a critical component of achieving financial stability and long-term goals. While banks are the most typical venue to open a savings account, credit unions provide an alternative that may provide greater rates and reduced costs.

Credit unions are member-owned and run non-profit financial entities. They frequently provide attractive interest rates, flexible periods, and individual care for savings accounts. In this section, we will look in depth at credit union savings accounts, comparing and contrasting them with typical bank savings accounts.

We will also cover the advantages and disadvantages of credit unions, as well as recommendations for selecting the best credit union savings account for your requirements.

What Is a Credit Union Savings Account?

A savings account is a deposit account that pays interest at a bank or other financial organization. Though these accounts normally yield only a low-interest rate, their safety and dependability make them an excellent choice for storing funds for short-term requirements.

Savings accounts may have some restrictions on how frequently you can withdraw funds, but they generally provide exceptional flexibility that’s ideal for building an emergency fund, saving for a short-term goal like buying a car or going on vacation, or simply sweeping surplus cash from your checking account to earn a little interest.

How Savings Accounts Work

Savings and other deposit accounts are major sources of funds for financial firms. As a result, you may find savings accounts at almost every bank or credit union, whether they are traditional brick-and-mortar establishments or just function online. Savings accounts are also available at several investing and brokerage organizations.

Interest rates on savings accounts vary. Banks and credit unions may adjust their rates at any moment, with the exception of promotions offering a fixed rate until a specific date. The more competitive the rate, the more likely it will fluctuate.

Top 10 Credit Union Savings Account Rates

Here are some credit unions with high savings account interest rates:

Alliant Credit Union
Capital One 360
Connexus Credit Union
Discover Bank
Marcus by Goldman Sachs
Navy Federal Credit Union
Patelco Credit Union
Simple Bank
Synchrony Bank
TIAA Bank

Alliant Credit Union

Alliant provides an above-average savings interest rate. Membership is not restricted; you can join with a $5 payment to a charitable organization. Alliant’s mobile app is well-liked, and customers have free access to an 80,000-account ATM network.

Capital One 360

For its credit union savings accounts, Capital One 360 provided competitive savings rates. Their ordinary savings account provided an APY (annual percentage yield) of 0.40% at the time, which was greater than the national savings account average. They also had a 360 Performance Savings account with a higher APY of 0.50% on balances of $10,000 or greater.

Connexus Credit Union

Connexus offers no-fee checking accounts. It features a network of 54,000 fee-free ATMs, and members can get reimbursed for out-of-network ATM fees. Membership is open to anybody who makes a $5 gift to the Connexus Association, an educational organization.

Consumers Credit Union

Although its savings interest rate is minimal, Consumers offers extraordinarily high interest on its checking account, subject to certain activity criteria. Consumers reimburse members for expenses incurred at out-of-network ATMs. Membership is open to anybody who pays a $5 fee and deposits at least $5 into a savings account.

Navy Federal Credit Union

Navy Federal has around 300 locations and a great customer service record. It provides complimentary checking accounts. Active-duty and former military personnel, as well as their immediate families, as well as Department of Defense workers and retirees, are eligible to join Navy Federal.

Discover Bank

The Discover Online Savings Account currently has an APY of 3.75%. Users can begin collecting money immediately away because there is no minimum balance requirement in their account. Discover also occasionally provides welcome incentives to new clients who make a minimal deposit.

Savings account holders’ interest is compounded daily and paid out weekly. This means that savers earn interest on interest every day and have it credited to their accounts every month. Just keep in mind that, like any other high-yield savings account, the interest rate is variable and subject to change at any time.

First Tech Federal Credit Union

The interest rate on First Tech’s fee-free checking account is competitive. Its savings account for children has one of the highest interest rates available. Membership is not restricted; you can join after joining a financial education nonprofit for $8.

How Do Credit Union Savings Accounts Work?

Credit union savings accounts function similarly to bank savings accounts. You put money in the account, which is insured by the government and earns interest in exchange for letting the financial institution use it. These interest payments are known as dividends at a credit union.

The more money you deposit, the more interest you will earn.

Yields

The annual percentage yield (APY) is the rate of interest you earn on your investments after compounding. It differs according to the credit union and other factors. Savings accounts at many credit unions pay better interest rates than savings accounts at banks.

Credit union revenues are dispersed to members in a variety of ways, including lower interest rates. To obtain the greatest savings account interest rates, however, you should check at individual banks and credit unions.

The interest rates on various types of savings accounts may differ. High-yield savings accounts, for example, typically pay higher interest rates than conventional savings accounts. These accounts, however, may require a bigger beginning deposit or continuous balance.

Requirements for a Minimum Balance

A minimum balance is the amount of money that must remain in a savings account. This means you must maintain a particular level in order to collect dividends or avoid a low balance fee. For example, an account holder with a minimum balance of $100 will not get dividends if their savings is only $90 at the time.

Fees

Credit unions often have cheaper costs than banks, but some fees may apply. Your credit union may charge you overdraft fees or fees for using out-of-network ATMs, while many credit unions offer refund options for these ATM expenses. Monthly fees may also apply if you do not maintain the requisite minimum amount in your savings account.

Deposit Insurance

Savings accounts at federally insured credit unions are similarly safeguarded to savings accounts at banks. The National Credit Union Administration (NCUA insures while the Federal Deposit Insurance Corporation (FDIC), insures bank accounts and credit union accounts). This protects deposits of up to $250,000.

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Credit Union Savings Accounts vs. Bank Savings Accounts

Before you open a savings account, you should think about the distinctions between credit unions and banks.

Credit Union Savings Account	Bank Savings Account
You must meet membership requirements to join a credit union and apply for an account	Members of the general public can apply for an account without meeting any specialty membership requirements
Generally higher APY and lower fees for savings than banks offer	Generally lower APY and higher fees on savings than credit unions offer
Nonprofit organization	For-profit organization

A savings account at a credit union indicates that the account holder is a member and thus owns a portion of the credit union. The organization is managed by a volunteer board of directors elected by members. Account holders are merely consumers of banks, which are owned by their shareholders.

Credit unions are charitable organizations. Profits are returned to members in the form of lower loan rates and better savings account yields. Banks are for-profit enterprises, which means that profits are retained and reinvested in the business or distributed to shareholders.

How To Open a Savings Account at a Credit Union

To open a savings account with a credit union, you must first become a member. Most credit unions cater to certain groups, such as members of a specific profession or people working for a specific organization. To become a member, you must apply.

You can open a savings account online or in person at a bank once you’ve been authorized. Fill out the application with your information and attach any required documentation, which should include your Social Security number and a government-issued ID.

Finally, you will almost certainly be required to submit a minimum opening deposit. Credit unions regard your savings account as your “share” of the organization and may refer to it as a share account. Some credit unions have open membership choices.

For example, you could qualify by making a small donation to a specified organization. To see if this is an option for you, thoroughly study the membership requirements for any credit unions you are considering joining.

Before selecting a credit union, do your homework. Some savings accounts may include extra capabilities, such as the ability to access funds with an ATM card or a debit card. Low costs, high APYs, exceptional service, and features like user-friendly apps distinguish the finest credit unions.

Take Away

Savings accounts at credit unions might be an excellent alternative to standard bank savings accounts. They frequently provide reasonable interest rates, flexible repayment arrangements, and individual service. You can become a member-owner of a financial institution that is dedicated to serving your best interests by choosing a credit union over a bank.

However, before creating an account, do your homework and compare rates and terms from multiple credit unions. When deciding on the best credit union savings account for you, keep fees, accessibility, and convenience in mind.

You can set yourself up for financial success and attain your savings goals faster if you take the time to choose the correct credit union and savings account.

Frequently Asked Questions

What is the most basic type of savings account at a credit union?

These are the types of savings accounts that are commonly found in traditional banks or credit unions. These sorts of savings accounts often allow you to earn interest on your money, albeit the rates are usually lower than those offered by other savings products.

is my credit union savings account safe?

Money put in a savings account is safe at federally insured credit unions. These funds are insured by the National Credit Union Association (NCUA) for up to $250,000 per individual account holder. The insurance protects you from financial loss if the credit union is unable to repay your funds.

How old do you have to be to create a credit union savings account?

In general, minors find it difficult to open a savings account without the assistance of a parent or guardian. varied credit unions may have varied age requirements, but because you must be 18 to sign a contract, it is uncommon for a juvenile to be able to open an account on their own.

How can I close a credit union savings account?

To close your credit union savings account, contact the credit union and provide it with your account details. Some credit unions may also ask you to complete a form. Check for any pending withdrawals before closing the account, update your direct deposit details with your employer and others who make direct payments to your account, and retrieve your account’s history if necessary.

Credit Union Savings Accounts: Interest Rates, Fees, and Benefits