Savings accounts are a secure location to deposit money and earn dividends on your funds. Dividends are the credit union’s version of interest earned. Savings accounts differ from checking accounts in the fact that they earn interest.
The idea behind a savings account is that you place money into a financial institution for us to use in lending. In return, you get paid dividends on your investment. Also, when you need cash or a loan, it’s equally there for your use.
Additionally, when using a bank or credit union, your money is federally insured which means your funds are protected in case of loss or disaster. Learn more about how federal insurance for a credit union works at www.mycreditunion.gov.
Watching your money grow is the best part of having an account. Your money grows by compounding interest. The interest rate is the percentage of funds compounded monthly or annually on the savings in the account. The interest rate on your account depends on the specific type of account you choose for savings. Many accounts require a minimum balance to earn dividends in regular savings. Money Federal Credit Union has a $100 minimum balance to earn dividends on a personal savings account. Other types of accounts have different requirements. In any case, your money grows by compounding interest on the savings.