Competitive interest rates, minimal fees and more perks of banking at a nonprofit institution.
Credit unions are nonprofit institutions known for offering higher interest rates on their products than other for-profit banks. Historically, credit unions were set up to help workers access banking services and products without high rates and fees typically associated with traditional banks.
Unlike banks, customers at credit unions are considered members who are also part-owners of the credit union. As such, members can take part in decision-making processes like voting for the board of directors. Much like FDIC deposit insurance at banks, deposits at credit unions are insured up to $250,000 by the National Credit Union Administration. Additionally, federally chartered credit unions are regulated by the National Credit Union Administration, whereas state-chartered credit unions are regulated at the state level.
How does a credit union savings account work?
The savings accounts offered by credit unions work the same way as they would at a bank. There are usually a number of options available, including high-interest savings accounts and CDs. With some credit unions, you might be able to find introductory offers or extra features. When shopping around for financial products, compare your options to find the one that best meets your individual needs.
Credit union savings accounts
| Name | APY | Minimum deposit | Account highlights |
|---|---|---|---|
| Alliant Credit Union High Rate Savings Account | 1.8% | $5 — paid by Alliant | NCUA insurance and no monthly maintenance fee if you sign up for eStatements |
| American Airlines Credit Union Primary Savings Account | 1.71% | $5 | NCUA insurance |
| Wings Financial Credit Union High Yield Savings Account | Up to 1.26% | $0 | NCUA insurance |
| Connexus Credit Union Savings Account | 0.25% | $5 | NCUA insurance, unlimited ATM withdrawals and access to over 50,000 fee-free ATMs |
| Bethpage Credit Union Savings Account | 0.2% | $5 | NCUA insurance, ATM card and low $5 minimum balance requirement |
| Golden 1 Credit Union Regular Savings Account | 0.15% | $1 | No monthly maintenance or minimum balance fees |
Compare with bank savings accounts
Advantages and disadvantages of savings accounts
What are the advantages of a credit union over a bank?
Since credit unions are owned by customers, you might find that the rates and fees are lower than what a bank offers. Minimum deposit requirements are often lower, making it easier to qualify for savings plans and CDs.
How to compare credit union savings accounts
Before you can compare savings accounts offered by credit unions, you’ll need to make sure you’re eligible to become a member. Some credit unions have membership requirements based on your location or occupation, while others may allow anyone to become a member. Once you narrow down your choices, you can begin to compare features of each savings account.
Eligibility
Make sure you’re eligible to open an account at the credit union you’re considering. Eligibility requirements vary by institution, so shop around to find one that’s right for you.
Membership fee
Credit unions will often require a fee to “buy” your membership. This is typically no more than $1 or $2 and will be deducted from your initial bank account. Others might ask you to make a donation to a partner organization in order to become a member.
Interest rates
Once you’ve narrowed down your options, check the interest rates for the savings accounts you’re interested in and ensure they’re competitive with what you’d find at a traditional bank.
Fees
Check for any fees that might come with the account, including monthly maintenance, minimum balance, ATM or excessive withdrawal fees.
Accessibility
Some credit unions offer online banking or mobile apps to give you unlimited access to your account. You should also consider how many branches and ATMs you’ll have access to, and how far the nearest location is.
Option for a linked account
It’s common to link savings accounts to a standard checking account so that you can easily transfer funds from one to the other. If you don’t want to open a checking account at the same credit union, you’ll need to check if you’re allowed to link your savings account to an account at another institution.
Minimum balance requirements
To avoid minimum balance fees, look at accounts that have no requirements for how much money you keep in your savings account. If you decide on an account that has a minimum balance requirement, be sure to keep your balance above that level to avoid charges.
Bottom line
If you’re looking for a personalized, no-frills banking experience, a credit union may be just the ticket. Most offer products with competitive rates and minimal fees, allowing you to grow your savings and reach your financial goals faster. Eligibility requirements are stricter than with traditional banks, however, and branch availability is often limited.
Before making a final decision, compare your options with our guide to savings accounts.
