Get 2% on your first $2.5K with Affinity Federal CU’s new savings account
With inverted interest rate tiers, Affinity is offering its members an incentive to get started saving.
Affinity Federal Credit Union has announced the creation of the SmartStart Savings account, which encourages new savers to start a savings account. The bank product features an inverted interest tier structure, where accounts with the smallest balances get the best interest. This is different from most other banks, which reserve the best interest rates for accounts with the highest balances.
At a glance:
Name: SmartStart Savings
Features: Starter savings account with an inverted tiered interest rate structure, debit card
Minimum balance: None
APY: Up to 2.00% for balances up to $2,500 (currently 1.98%), 1.00% for balances between $1,000 and $4,999.99, 0.20% for balances of $5,000 and up
Limitations: Applicants must be an Affinity member. Membership is offered based on where you live or work, or anyone can donate $5 to select charities during the application process to join.
“We have been meticulously observing not only the feedback of our members and employees, but also market trends and financial needs on a national level,” Affinity CEO and President John Fenton said in an announcement. “We hear the needs of our members, which is exactly why we are innovating our products and offering a new option to help them prioritize their financial wellbeing and reach their savings goals even faster.”
The SmartStart Savings account offers a 2.00% interest rate for accounts with balances under $2,500. Once the balance hits $2,500, the interest rate drops to 1.00%. At $5,000, the account incurs the bank’s standard savings rate, which is currently 0.20%. This inverted interest rate makes the SmartStart Savings account the best savings account rate-wise for small balance accounts.
How it compares to other savings accounts
However, as the account matures or accumulates, one may need to consider transferring their funds to another account. CIT Bank Savings Builder High Yield Savings Account, for example, offers a 1.75% APY on accounts with $100 saved per month or a balance of $25,000 or more. Otherwise, the account has an APY of 1.15%. Barclays Online Savings Account offers a 1.70% APY with no fees and no minimum deposits. American Express Personal Savings High Yield Savings Account yields a 1.7% APY, also with no minimum balance and no fees.
Affinity Federal Credit Union serves the Greater New York Tri-State metropolitan area. While criteria for membership has traditionally been limited to specific geographies or employment, anyone can become a member by donating $5 to their choice of select charities during the application process. Otherwise, membership is open to those who live in select parts of Edison, Franklin Township (Somerset County), New Brunswick, North Brunswick and Piscataway, New Jersey, or anywhere in Norwalk, Darien, New Canaan, Weston, Westport or Wilton, Connecticut. Employees of partner organizations or family members of existing Affinity members may also be eligible.
Picture: Affinity Federal Credit Union