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Bankrate Highlights CU's Savings Accounts
Wednesday, October 21, 2015 6:35 AM

Consumer finance website Bankrate.com featured five types of credit union savings accounts in a recent article, highlighting the advantage consumers can gain from looking to credit unions for their financial services needs.

Credit union savings accounts are usually better deals for consumers, George Hofheimer, Filene Research Institute chief innovation officer, told Bankrate, specifically highlighting the popular Christmas club savings products. Hofheimer also pointed out that savings accounts at credit unions often have lower minimum deposit levels, fewer fees, and more financial education tools than banks.

The five types of credit union savings accounts were:

  • Kids’ savings clubs, which help children build savings by providing incentives for putting money away. “Reaching kids at a young age is important,” Kristina Flores, Prospera CU, Appleton, WI, told Bankrate.com. “They need to know how to save, spend, and share money;”
     
  • Goal-setting accounts, which can be used to fund big-ticket purchases such as automobiles or vacations. These savings accounts often have the highest interest rates and “help people do a better job of saving,” as members are encouraged to not make withdrawals from these accounts, according to Michael Mattone, Municipal CU, New York;
     
  • First-time saver accounts, which help improve savings practices by offering high interest rates on savings accounts that can only grow to a set limit. At Delaware Alliance FCU, New Castle, DE, members can save up to $1,000, at which point they must transfer funds to a checking account;
     
  • Savings rewards accounts, which link checking accounts to savings accounts. These programs can ensure that rewards earned on a checking account are automatically deposited into a savings account; and
     
  • College student savings accounts, which offer certain perks such as high interest rates and waiving monthly fees. At Michigan State University FCU, Lansing, MI, for example, the credit union’s Spartan Saver account gives students access to free mobile banking and online banking, and requires a minimum balance of only $5.