A savings account is a great place to keep cash that you don’t plan to spend immediately. These accounts keep your money safe and accessible while paying you interest, but there are several different types of savings accounts to choose from. Each option has different features, so it’s important to understand what’s available. Osoyoos Credit Union (OCU) offers members three types of savings accounts, all of which have its own benefits.
1. Accelerator Savings Account
This savings account is a non-registered account and on a monthly basis, pays a very competitive interest rate of 0.80% on the closing daily balance. The entire balance earns the current rate of interest being paid to the account.
Benefits:
- Two free withdrawal transactions per month
- Additional withdrawal transactions will incur a service charge.
- Accessible through a teller, MemberDirect®; (online banking) or at an ATM
- No cheques or automatic withdrawals
- Interest calculated on the closing daily balance and paid monthly
How Will I Benefit?
The early bird gets the worm, especially when it comes to building your savings. The earlier you start, the more time your savings have to benefit from compound interest.
When you start investing, most of your growth comes from your contributions, but because of compounding, the interest on your investments will eventually contribute more to your growth than you do.
By starting early, you can contribute less overall. For example, if you start saving $100 a month at age 25 and you earn a 6% annual return, you’ll have saved about $140,000 by the time you hit age 60. If you were to start saving 10 years later, you would have to save $200 per month for 25 years to catch up.
Who Benefits?
If you’re looking to accelerate your financial growth within a short period of time, this is the best option for you.
2. Plan 24 Savings Account
At 0.05 % interest calculated daily (and paid monthly), this savings account has no minimum balance and minimal service charges.
Benefits
- Interest is calculated on the closing daily balance and paid to the account monthly
- Detailed annual statement
- Interac direct payment access at a per item charge
- Automatic debits, credits and Interac transactions allowed at a minimal charge
- MemberDirect®; bill payments at a minimal charge
- Minimal charge ATM for access at non-credit union ATM’s
How Will I Benefit?
Regardless of your account balance, you earn the same interest rate. This type of account also provides members with easy access to ready cash for expenses or investments. With this type of savings account, you have the convenience of MemberDirect®; this online system provides you with 24/7 access to your credit union accounts. Through MemberDirect®, you can handle most financial transactions – personal and business – at your convenience.
Who Benefits?
This type of savings account is ideal for members who only have a few transactions per month and want to maintain moderate or low balances in a separate account. It is designed for members who have a fluctuating account balance, don’t do a lot of transactions, and are looking for an accessible, simple and flexible savings account.
3. Special Savings Account (MMB)
With the special savings account (minimum monthly balance), deposits and withdrawals are time-sensitive thus encouraging members to save. The interest of 0.05% is accrued on the minimum monthly balance and paid to the account quarterly.
Benefits:
- Minimal charge for ATM access at non-credit union ATM’s
- Detailed annual statement
- Interac direct payment access at a per item charge
- MemberDirect®; bill payments at a minimal charge
- Automatic debits, credits and Interac transactions allowed at a minimal charge
How Will I Benefit?
When it comes to saving for important events or purchases, you should always try to maximize your saving potential. If you want to plan ahead, our special savings account (MMB) is an ideal option; it earns a higher interest rate can help you get to your savings goal. It provides you with an incentive to be disciplined in your saving by not allowing you to withdraw the money for a certain amount of time in order for you to receive a higher interest rate! Like the Plan 24 Savings option, our special savings account offers the convenience of MemberDirect®.
Who Benefits?
People who typically choose this savings option are goal-oriented and want to save money over a longer period of time.
Why Should I Open a Savings Account?
While savings accounts do not typically pay a high rate of interest, it is better than the rates offered with chequing accounts. Currently, major Canadian banks pay 0% interest on chequing accounts, whereas savings accounts can pay between 0.25%-0.35%.
If you have money that is surplus to your day-to-day requirements, there’s no need to put it in a chequing account. You can earn a little something extra by opening and depositing it into a savings account, instead. Doing so does have some advantages compared to the alternatives: there’s no risk in a savings account because your money is CDIC-insured, and unlike a guaranteed investment certificate (GIC), your money is not locked in and there’s no minimum amount to deposit. All of this provides meaningful flexibility.
How Do I Choose a Savings Account?
Although we have laid out details about our savings accounts, your head may be spinning and you may have more questions than when you started. This is completely normal when it comes to making the right choice about which savings account is best suited to you.
With over 73 years of experience to draw on, we can help our members make informed decisions that align with their goals, needs and interests. Let us help you choose the right savings account option.