published march 1, 2023
Not all savings accounts are created equal.
Thinking about opening a savings account, but aren’t sure where to start? We can help.
Savings accounts: the name might make it seem like they all offer the same thing—a place to stash your cash. We’re here to tell you not all savings accounts are created equal.
The basics: How do savings accounts work?
A savings account is a place where you deposit money and typically get a return in interest. The accounts are a great option for holding money you don’t plan to spend right away. They can be used to reach financial goals like starting an emergency fund or saving for a big purchase.
What about money markets, certificates, and IRAs?
Money market accounts blend the features of a savings account with some of the features of a checking account. You can earn interest on your balance, while also getting more flexibility when withdrawing funds, like check writing. *
Certificates are a type of safe account that allow members to earn dividends on an initial deposit by agreeing to leave it untouched for a set amount of time.1
IRA stands for individual retirement account. It’s a tax-advantaged investment account for retirement savings. IRAs can double as an emergency fund for qualified withdrawls. For example, Roth IRAs, you can withdraw regular contributions penalty-free at any time. Compare IRAs.
How to choose the right one.
Decide what its main purpose is.
First, decide what you’ll be using your savings account for. It could be that you want quick access to your money once you reach a goal and are ready to spend it. You could be looking to lock it away and watch it grow overtime, so you’ll have more in your pocket down the road.
What features are for you?
Here’s where savings accounts can start to look different; what do they offer beyond a place to put your money?
A few features to think about are:
- Is there an app and is it easy to use?
- Are there any service fees?
- Can I automate my savings?
- Does the account make it easy to “bucket” my money?
- Are there minimum deposit or balance requirements?
- How does the interest rate compare to other accounts?
- Is it simple to access and transfer my funds?
- Are there any penalties to get my funds?
What does STCU offer?
Whether you're saving money for a new wardrobe, college, a house, or retirement, there's an STCU savings account that can help you get there.
There are lots of savings account options out there. It’s important to pick the one that’s right for you.
*STCU allows up to six (6) checks or transactions, such as transfers, from your savings or money market accounts each month. Deposits and withdrawals are unlimited when done in person at a branch location, at the Night Drop, or through the mail. A $5 “excess item fee” is charged for the first three items above that limit and $15 is charged for each additional item. See transaction limits.
1Minimum opening deposit varies. View all certificate rates and terms.
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