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Take Your Savings Further with Credit Union Club Accounts

Take Your Savings Further with Credit Union Club Accounts By Cyndi Cohen
Published July 17, 2012
Credit Unions Online
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Most credit union members aren't looking for reasons to save, they're looking for ways to meet their savings goals. While many are trying to stash away cash for the usual big ticket items and major expenses like a new home, a new car or to fund a child’s education or a comfortable retirement, some are also trying to save for those extra things in life that tend to add up – holiday expenses, vacations, home improvements, weddings, and many more. Credit unions can help make this happen with convenient, high-yield Club Accounts. These flexible, fee-free accounts with no minimum balance requirements allow members to save money for different purposes while keeping that portion of their savings easily accessible and still earning a generous interest rate.

Not Just a Christmas Account Anymore

Now linked to direct deposit and offering different savings options, Credit Union Club Accounts have certainly evolved from the traditional mail-based Christmas and Vacation Club accounts of yesteryear. And, since credit union members are saving for so many different things nowadays, a Club Account can be a very useful tool for finance management.

Even those with the best intentions for saving can benefit from the discipline of a Club Account. With direct deposit or payroll deduction, you don't just plan to put some money aside; you actually do it, every payday. Over time, that money adds up and earns interest. In addition, the money is accessible whenever you need it, though it's separate from one’s regular savings and checking to make planning easier.

“Club Accounts have come a long way from the days when they were strictly for saving for holidays and vacations,” says Victor Derrick, Vice-President of Member Services at Freedom Credit Union (Warminster, PA). “Credit unions would mail checks to members with holiday accounts in October with the funds in the account, and would mail checks in April for the vacation accounts -- now, members can automatically save for anything and access their money anytime.”

Freedom offers the traditional Club Savings Accounts, like Holiday and Vacation Club Accounts. The credit union also offer members Name-Your-Own Savings Accounts, which are just like they sound – Members name their own accounts to save for any purpose, from weddings to rainy days.

According to Krista Barry, Marketing Coordinator, members can have up to five accounts and there is no minimum balance required in any Club Account. The accounts have the same convenient features as their Primary Savings Accounts, so members can earn dividends on the funds they transfer to their Club Accounts.

Also, it is easy for Members to access the money in their Club Accounts -- they simply visit a branch to make a withdrawal, or transfer money to their Savings or Checking Accounts, then make a withdrawal from a nearby ATM.

Barry says that the best feature of the Club Accounts is the automatic transfers that Members can set up. “They only have to designate how much money they want taken out and how often -- this can be done when they set up the Club Account or anytime by talking to a Freedom Representative.”

Earning a dividend rate of .40% and an annual percentage yield of .40%, the Club Accounts are very popular with Freedom Members. “As of today, we have approximately $10 million in Club Accounts, which is approximately 20% of our overall deposits of $516 million,” contends Derrick.

MIT Federal Credit Union (Cambridge, MA) also offers Holiday and Vacation Club Accounts to members, featuring:

  • No minimum balance requirement to open your account OR to earn interest
  • Dividends are compounded daily and paid monthly
  • No maintenance fees
  • Deposits and withdrawals can be made at any time, with no penalty
  • Transfer funds to or from this account via our e-Branch online banking system or at branch locations
  • Vacation Club funds are automatically transferred to your Savings Account by June 15 (for ATM accessibility)
  • Holiday Club funds are automatically transferred to your Savings Account by October 15 (for ATM accessibility)
  • Payroll deduction is available
  • Funds are fully insured up to at least $250,000 by the National Credit Union Administration (NCUA)

Jodie Brothers, Marketing Manager, says that the Club Account rates are the same as the credit union’s regular savings rates. “It’s a good way for our members to separate savings for specific purposes.”

Likewise, Freedom Credit Union’s Barry says she would definitely recommend Freedom’s Club Saving Accounts to all members. “It’s an easy way to put money away for any purpose without any thought or extra effort from the member -- if saving money doesn’t come naturally to someone, it’s the perfect solution for budgeting and preparing for expenses like vacation, holidays, or even unexpected costs!”

Looking for a way to realistically save for life’s little (and not so little) extras? Open a Club Account or two at your credit union and start saving now! Not a member? Find a credit union and join today.

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