Sooner or later, you’re probably going to face the same dilemma as millions of other Northern Michigan residents. Traditional banks simply no longer fit your needs. They can’t offer you the service you need. The rates you need. The incentives you need. And the flexibility you need. But as a customer? You’re locked in. There is no flexibility. No understanding. And no solution that can serve your needs. Perhaps you’ve heard of a credit union savings account. But is it right for you? And what makes them different from traditional banks?
What Is A Credit Union?
A credit union differs from traditional banks because you’re not just a customer; you’re a co-owner.
A credit union is a non-profit lending institution where its members and customers serve one another as members of a community, typically based on where you work, live or do business. Fees exist solely for the benefit of other customers and not the institution itself. It’s community focused because it’s a community itself—not a faceless bank.
What’s So Different About A Credit Union Savings Account?
Flexibility. With a credit union savings account, you can save as little or as much as you want. Your savings are for your benefit, not for the benefit of corporate shareholders. As a result, rates can be much more accommodating to your lifestyle. Whether you’re a retiree, recently married or just opening up your first savings account, you’ll find that a credit union can offer you the flexibility and the returns you need!
How Does A Credit Union Savings Account Work?
Typically, credit unions offer you two options. The first is interest rates on your savings which are typically fixed, although some may offer variable rates depending on eligibility. More commonly, credit unions give a yearly dividend pay-out. This is another difference from traditional banks. Any profit made within the course of a year is shared among its members.
What Are Some Benefits Of A Credit Union Savings Account?
- Savings Clubs
Savings clubs are designed to teach children early on the value of saving money. Let’s face it—life is unpredictable. Savings accounts can help teach your kids the value of having a safety net when sudden emergencies occur so they can face them confidently and securely.
An additional bonus to savings clubs offered by credit unions is incentives. Many award reward points for every amount saved, just like a credit card. Points can then be redeemed for gift cards, movie tickets and in some cases, even cash.
- Savings Goals
Similarly, savings goal plans offered by credit unions can help adults reach particular goals such as a vacation or home renovations by automatically depositing a set amount of cash into a checking account at a later date. Not only do savings goal programs frequently come with higher interest rates, but minimal balances and minimal fees. Consider it an automatic rainy day fund—but one with a higher return rate.
- Beginner’s Savings Accounts
New to saving? Maybe you’re a college student who has only had a checking account to fall back on. Or newly married and unfamiliar with a joint savings account. Whatever your situation, a credit union savings account will frequently offer high yield interest rates to help you build both a healthy account and appreciation for the value of saving. Not only that, but credit unions frequently have programs and specialists that can help teach you how to plan your personal finances effectively.
What Do I Need To Open A Credit Union Savings Account?
Much like traditional banks, you’ll need a minimum deposit. Depending on the credit union, this can be anywhere from $5 up to $100. You’ll also need two forms of ID—one being a photo ID, such as a driver’s license or passport. More importantly, since credit unions are typically geographically confined, you must present proof that you work, live, worship or attend school in the area the union serves. Most typically, this will be a bill or registration notice. Finally, any interest accrued from a savings account needs to be reported on your taxes. Most credit unions will insist on a copy of your social security card or birth certificate to help establish your Individual Taxpayer Identification Number (ITIN).
What Should I Ask About When Opening A Credit Union Savings Account?
- What is the minimum deposit?
- What, if any, are the monthly fees?
- Is there a minimum balance required to avoid monthly fees?
- Can a percentage of my paycheck be directly deposited into the account?
- How flexible are the interest rates?
- Is online management of my account available?
- What is the minimum balance allowed before I can withdrawal?
- Is there a fee for withdrawing from my savings?
- Can savings be transferred into my checking account?
- Is a shared savings account available?
- Will I have access to a personal savings specialist?
- What additional programs are available?
- How can I find the right savings account to suit my needs?
Ready to see the difference a credit union can make for you? Visit Calcite Credit Union today or call (877) CALCITE to speak to one of our representatives.