How to Find the Savings Account that Works Best for You

April 2018

Do you have a savings goal you’d like to reach? Determining a goal is a great way to help grow your money to finance the things you want or need. To meet this goal, it’s important that you consider a savings account as a secure place to store your money. Using a savings account will help keep the money you’re saving away from your everyday spending money. There are a variety of savings account options, but it’s up to you to determine the one that works best for you and your savings goals. In this report we highlight typical savings options offered by many financial institutions to help you understand your options.

Basic Savings Account

This is an account that earns interest and can be opened with an initial deposit as small as $5 or as much as $100, depending on the financial institution. Interest is calculated daily and paid monthly. When you’re looking into opening a savings account, be sure to do your research to understand the requirements of the account. For example, some financial institutions require that you keep a minimum balance in your savings account in order to earn your monthly interest. Even more, there are some financial institutions that charge a monthly fee unless you maintain a minimum or specific average monthly balance. Since a savings account is intended to grow your finances, there are some financial institutions that limit the number of withdrawals you can make each month.

Premium or High-Interest Savings Account

Though basic savings accounts are a great option to get your savings started, the monthly interest rate paid is often pretty low. To help grow your savings faster, there are many financial institutions that provide savings account options that pay a higher interest rate than a basic savings account. These accounts typically require a larger initial deposit and minimum balance. Some accounts have tiers where the interest rate increases as the account balance increases. Each tier is defined by the range of account balances and the interest rate it will earn. Like the basic account, you will want to pay attention to the requirements surrounding these accounts as a monthly fee may be charged if you fail to maintain a minimum balance or specific average monthly balance.

Money Market Account

This is an alternative savings account option which often requires a larger initial deposit and minimum balance, but in return pays a higher interest rate. Withdrawals from the account are limited to 6 by the Federal Reserve, but please note that the financial institution may limit it to fewer. A penalty is assessed if the withdrawal limit is exceeded. Some of these accounts may have tiers. Keep in mind that there may be a monthly fee if monthly direct deposits are not made and there may also be a monthly fee if the account balance drops below the required minimum balance.

Certificate of Deposit (CD)

This is another alternative savings account option that earns interest for a fixed period of time or term, typically ranging from a few months to a few years. With this account, the longer your term is, the higher the interest rate will be. The minimum amount required to open a CD is determined by the term and shorter terms typically have lower minimums. It’s important to note that a penalty is assessed if money is withdrawn from the CD prior to the end of the term. The early withdrawal penalty is typically equal to an amount of interest.

Choosing the Right Account for You

Once you’ve identified what your savings goal is, it will be easy to determine the type of account you want to store your money. The benefit is that you could choose any one of these account options to store your money and earn interest on it. Wondering what options CCU has to offer? Check out the list below.

Corning Credit Union offers share savings, money market, and certificates ranging from 3 months to 5 years with these rates.

 

 

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