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Savings Accounts – What You Should Know

Savings Accounts – What You Should Know Blog Image
Opening Youth Account Affinity FCU Blog
By: AffinityFCU

Key Points:

  • Savings accounts are a great place to store cash for your emergency fund or short-term savings goals.
  • Strive to keep three to six months' worth of living expenses in your savings account.
  • Many savings accounts are limited to only a few transactions per month.
  • Look for savings accounts that offer a high annual percentage yield.
  • Credit union savings accounts are insured up to $250,000 by the National Credit Union Share Insurance Fund. (NCUSIF)

What is a savings account?

A savings account is a deposit account held at a credit union or bank. People will open savings accounts and deposit a portion of their financial portfolio. Savings accounts generally will earn more interest than checking accounts, but not as much as certificates, CDs or other investment options. Overall, savings accounts are a safe option to earn interest while ensuring fast access to your money when you need it.

Do I need a savings account?

A savings account may be right for you if you already have a checking account that contains two months’ worth of living expenses. A good next step would be to open a savings account, preferably one that offers a high yield, so you can capitalize on higher savings account interest rates with minimal risk.

What is a high yield savings account?

A high yield savings account could be the best savings account for many customers. It’s like a traditional savings account, except it offers better-than-average interest rates on deposits. It’s important to shop around and compare interest rates and other features to find the best high yield savings account.

At Affinity, our SmartStart Savings Account offers 10 times the national average at 4% APY! It’s a great option for those looking for a federally insured option with guaranteed returns. Here are three reasons why Affinity’s SmartStart Savings Account is one of the top savings accounts out there:

  1. Your money is safe because it’s insured up to $250,000 by the NCUSIF.
  2. Your money has a guaranteed rate of return with low risk, so your savings are certain to grow over time.
  3. Your money is accessible as opposed to investing in CDs and being unable to access your funds without fees or penalties. And with Affinity, you can use your ATM card to get cash from your savings account at any ATM or transfer money any time using the Affinity Mobile Banking app.

Learn more about high yield savings accounts.

How much money should I keep in my savings accounts?

It’s generally a good idea to keep about 3 to 6 months’ worth of living expenses in your savings account. As explained above, money in your savings account is safe, offers guaranteed returns with no risk due to savings interest rates, and is accessible. If you have more money put aside, you may consider investment options that offer greater returns, although they may carry more risk. Please consult a financial advisor.

Is a savings account the same thing as an emergency fund?

Not necessarily. Some people will use their savings account as an emergency fund to be ready for unplanned expenses, such as medical bills, home or car repairs, job loss, etc. Others will use their savings account to achieve short-term savings goals, like funding their dream vacation or buying a new car. A savings account is a great option for both situations.

Does a savings account come with a debit card?

Savings accounts don’t come with debit cards, but if you have a checking and savings account at the same credit union or bank, you may be able to link your savings account to the checking account’s debit card.

Should I put money in a savings account or in a short-term investment account like a CD or a certificate?

Assuming the interest rates are similar, choose a CD or certificate only if you won’t need to access that money for the duration of the CD/certificate term. Otherwise, you may have to pay penalties for withdrawing your money before the end of the term. With a savings account, you can withdraw money without penalties (as long as you don’t exceed the maximum number of transactions per month).

How do I open a savings account?

Contact the credit union or bank of your choosing to find out how to open an account. Affinity would be pleased to help you open an account with us.

What are online savings accounts, and are they safe?

Online savings accounts are offered by financial institutions that operate online without a “brick-and-mortar” presence. These accounts are insured similarly to savings accounts at other credit unions and banks, so yes, they are safe.

Here are some of the pros and cons of online-only options:


  • Lower fees for their products and services.
  • Potentially more interest on deposits.
  • Online convenience vs. having to visit a bank lobby or drive-thru teller.


  • Customer service may pale in comparison to in-person service.
  • You may incur more ATM fees unless the online bank has a large ATM network.
  • Check deposits could take longer to process.

Compare online banks with “brick-and-mortar" banks.