Understanding Savings Accounts

Which savings account will help you power up your savings?

Rising interest rates have given savers a real opportunity to see their savings grow. But you have to pay attention to interest rates and understand the advantages and disadvantages between different accounts.

Savings Account

Pros: Most accessible option, easy to withdraw money, often comes with a debit card for everyday purchases, typically low minimum balance requirements.

Cons: Low interest rates, may not keep pace with inflation, not suitable for long-term savings goals.

High-Yield Savings Account

Pros: Offers higher interest rates than traditional savings accounts, readily accessible funds, often insured by the NCUA (National Credit Union Administration) or FDIC (Federal Deposit Insurance Corporation) up to $250,000.

Cons: Interest rates can fluctuate, may have minimum balance requirements to qualify for the highest rates, some might limit monthly withdrawals.

Certificate of Deposit (CD) / Share Certificate of Deposit

Pros: Offers the highest interest rates among these options, good for fixed-term savings goals (typically 3 months to 10 years), interest rate is locked in for the term, can be a safe way to grow your savings.

Cons: Limited access to your money during the term (early withdrawal typically comes with a penalty), interest rates can be lower than high-yield savings accounts if you choose a short term, not suitable for short-term savings goals.

Money Market Account

Pros: May offer slightly higher interest rates than traditional savings accounts, some offer check-writing capabilities, might offer debit card access.

Cons: Interest rates can be variable, may have higher minimum balance requirements than savings accounts, may limit the number of withdrawals or transfers per month.

As you consider what savings account makes the most sense for you. Remember to check out the interest rate paid and the conditions you must meet. A great option for many people looking to make saving automatic while earning a high rate of interest is SCU Direct. SCU Direct pays 5% APY on amounts up to $10,000, links to your SCU Checking account to enable automatic savings and you can withdraw money whenever you need it.

Explore SCU Credit Union savings Rates.

Still undecided? You can also stop in at one of our branch locations for assistance or reach out to our member service call center at 781-784-7725 or toll free at 1-877-661-3300.