Primary Savings

Having a designated account for saving separate from your checking account can help you reach your savings goals. Some of the key advantages of opening a savings account include:

• Building a cushion for financial emergencies. You’ll have the money to cover auto repairs, medical bills, and other unexpected expenses without relying on high-interest credit cards or loans.
• Protecting your funds through federal insurance. The NCUA guarantees savings accounts in the United States up to $250,000.
• Avoiding the risk potential of more complicated investments. For example, putting your money in the stock market carries the potential for financial loss. Most experts recommend investing funds only for long-term goals, such as retirement, that are more than five years away.
• Preserving easy access to your funds. These accounts are liquid, which means you can withdraw or otherwise use your balance immediately if you need the money. Even short-term options such as Share Certificates can prevent access to customer funds for anywhere from several months to several years.
• Taking advantage of compound interest. Your money will grow, and you will earn interest without any further action on your part. The longer you keep your balance in the account and the more money you deposit, the more you will earn.

Your savings plan has a higher likelihood of success if you set a goal and purpose for putting money aside. You should consider this type of account if you want to build an emergency fund, set aside money for home upgrades, save for future travel, meet your home down payment goal, or prepare for medical needs for you, your family, or your pets.

Wondering how to start saving money? Employ these strategies to make the most of your savings account:

• Start with small goals. The nonprofit initiative America Saves stresses the importance of breaking down a big target into smaller savings objectives. For example, if you want to save $2,000 this year, set an automatic transfer for $40 per week (rounding up a bit).
• Set aside unexpected funds in your savings account. When you get an unexpected windfall like a bonus, inheritance, or tax refund, put the money toward a rainy day rather than spending it.
• Establish a waiting period for frivolous spending. If you find that shopping puts a dent in your wallet, add something to your online cart, then leave it alone for 24 hours. If you go back and decide you don’t need the item (or forget about it completely), save that money instead.

Bankrate reports that credit unions often have higher interest rates on savings accounts than you’ll find at a traditional bank. The website recommends looking for local branches that display a commitment to serving the community for a personal touch absent at many large banks.

Other attributes to look for when signing up for a savings account include:

• Minimal fees. For example, you may want to avoid a bank that charges a high monthly maintenance fee or charges fees if you fail to meet a high minimum account balance. Any monthly fee will take a bite out of your savings.
• Competitive interest rates. First Californian Credit Union has an entry-level annual percentage yield of 0.10%, much higher than the average for these accounts of 0.01% or less.
• Withdrawal limits. Unlike with a checking account, federal law limits withdrawals from savings accounts to six each month.
• Easy checking account transfers. You can automate this process to consistently grow your balance with an automatic deposit each paycheck.
• Convenient online and brick-and-mortar access. Ideally, your financial institution should offer the best of both worlds, with local branches where you can speak with someone in person as well as robust online and mobile tools so you can have your financial information at your fingertips.
• The availability of other types of accounts. If you prefer to do all your banking with one credit union, you must choose a provider that offers a diverse array of personal and business solutions.

First Californian Credit Union offers these benefits and many more for customers who live, work, attend school, or worship in Utah. We also welcome the family members of our valued clients. Contact us today for more membership information to begin saving for your bright future and access our competitive APY without a monthly maintenance fee.