When your aim is to save money and create a nest egg, any financial boost to grow your funds faster is worth exploring. After all, stowing away money in a standard savings account is an okay strategy, but there are other account options you can use to bolster your saving efforts and provide a higher return if you meet their criteria.

High-yield savings accounts do just that. These accounts help you leverage your savings so you can reach your financial goals faster.

Individuals who set up these more lucrative accounts through a credit union can enjoy substantial savings benefits while also experiencing the perks of a not-for-profit, member-owned financial organization. Read on to learn why this savings strategy could be right for you. 

What are High-Yield Savings Accounts?

The name says it all: high-yield savings accounts are financial accounts that come with higher than average interest rates. On top of that, your savings can accumulate compound interest in these accounts, meaning that your interest earns additional interest— and that extra money can really add up. 

Let’s take a quick look at the key similarities and differences between traditional savings accounts and their high-yield counterparts: 

• Each type of savings account is designed to help you save money, unlike a checking account, which should be used for everyday transactions.
• The average APY (annual percentage yield) on general savings accounts is typically less than 1%, while high-yield accounts could provide 4-5% as of April 2024.
• Both traditional and high-yield savings accounts are safe and accessible. Deposits and withdrawals are simple, and federally insured credit union savings accounts are protected by the NCUA.

Benefits of High-Yield Savings Accounts at Credit Unions 

The main appeal of high-yield savings accounts are their competitive interest rates and potential for rewarding you with higher returns. 

For the best and most lucrative experience with this type of savings account, it’s smart to work with a credit union. These trusted financial organizations: 

• Offer high security and stability 
• Take a member-focused approach
• Provide personalized customer service
• Often offer even better rates than traditional banks

When you work alongside credit unions with high yield savings options, you can earn more and rest assured that your deposits will be federally insured for added protection. 

Comparing High-Yield Savings Accounts at Credit Unions 

High-yield savings account features and benefits can vary among different organizations. Comparing savings account options is the ideal way to find the perfect partner for your unique financial needs. 

First, you’ll want to choose the credit union that can best serve you by: 

• Considering additional benefits and perks offered by each organization. Is there a special account opening incentive? Could you receive added perks for holding multiple accounts at the same institution, such as a checking account or auto loan?
• Finding a credit union that is easily accessible, whether through local branches or online banking. You’ll want to be sure you can deposit or withdraw money easily and without fees or penalties.

Once you’ve decided on an organization to work with, browse their high yield account options: 

• Evaluate interest rates and annual percentage yields (APYs). You can find fee schedules for different types of accounts on most credit unions’ websites. Which account will give you the most bang for your buck over time? 
• Assess account fees, minimum balance requirements, and penalties. Most high-yield accounts require a minimum deposit and/or balance in exchange for the higher returns you’ll see on your money. 
• Understand possible restrictions on accessing your money. Are there limits on the number of withdrawals you can make, or how long you need to leave your money in the account? Can you make electronic transfers, utilize ATMs, or do you need to visit a branch in person?

Once you’ve determined which account will work best for your needs, you can start the account opening process online with most credit unions.

Maximizing Savings with High-Yield Accounts 

The benefits of credit unions savings accounts are apparent. And by taking advantage of a high-yield savings account, you can enjoy an extra boost for your savings. 

After setting up your new account, you can automate direct deposits to streamline your process and grow your savings fund on autopilot. From there, all you need to do is set your financial goal and track your progress.

As you take this next step in your financial journey, trust a credit union to provide guidance, dependable account options, and a community-oriented atmosphere. These organizations offer a multitude of other savings tools and resources that will all be at your disposal. 

Need help finding a credit union? Find one you’ll love for years to come by working with CUSelect.