High-Yield Savings Accounts That are Good for You and Your Wallet

Quorum Credit Union exceeds the minimum financial standards regulators require for a credit union to be considered well-capitalized. Our net worth remains at well-capitalized levels and Quorum has consistently maintained healthy levels of capital and liquidity, even through the most challenging of economic times.

Your Quorum accounts are insured up to $250,000 per person by the National Credit Union Share Insurance Fund (NCUSIF). Individual Retirement Accounts (IRA) are insured separately up to $250,000. The National Credit Union Administration (NCUA), a federal agency, administers the insurance fund and regulates federally insured credit unions. The fund is backed by the full faith and credit of the U.S. Government.

Depending on how your accounts are owned and what types of accounts you have, you can potentially increase the total insurance on your funds to greater than $250,000.

The Share Insurance Estimator, found here, can help you determine whether your accounts are established and insured appropriately. If you have already utilized the Share Insurance Estimator and still have additional questions, you can also reach out to the NCUA Consumer Assistance Center at (800) 755-1030. Representatives are available from Monday through Friday from 8 a.m. – 5 p.m. ET. You can also send an email with your questions to dcamail@ncua.gov.

If you have more than $250,00 in deposits and are concerned that your savings may not be fully insured by the NCUA, you can check the Share Insurance Estimator here to understand what is insured and what portion (if any) exceeds coverage limits.

Depending on how your accounts are owned and what types of accounts you have, you can potentially increase the total insurance on your funds to greater than $250,000 through multiple account owners or trusts with beneficiaries.

MyCreditUnion.gov contains more information about the National Credit Union Share Insurance Fund coverage for consumers.

Dividends are essentially credit-union-speak for interest. It’s the money we pay you for leaving your deposits with us.

APY is the amount of interest you earn on money you deposit into a savings accounts (including high-yield savings accounts), over the course of a year. How often interest is compounded is also figured into the APY. 

If you are considering two or more bank accounts for your savings, it pays to compare the APY on each for the full picture on how much your money and account balance can earn over a year.

What is the significance of the APY? In its simplest form, the higher the APY, the more money you earn. If you have $25,000 invested in a one-year term account with a 2.86% APY, at the end of the year, you will have earned $715. With a 2.50% APY, your return would be $625.

You may see a higher annual percentage yield (APY) on accounts that have a higher minimum deposit and a longer commitment for how long you must keep the money in the savings account. Be sure to familiarize yourself with the terms and conditions of any bank account you open. 

A hard pull or soft pull can occur when you open a new checking or savings accounts from an online banking, credit union, or financial institution. A hard pull (which typically happens when a lender checks your credit report to make a lending decision; for instance, when applying for a mortgage) can (temporarily) slightly lower your credit score, and will typically stay on your credit report for two years. A soft pull, on the other hand, is an inquiry performed by a financial institution on your credit report, but does not affect your credit score in any way.

When Quorum reviews a checking or savings account application, we may perform a soft pull on an applicant’s credit report through one of the three major credit reporting agencies (TransUnion, Experian, Equifax) for verification purposes, and also run the name through ChexSystems to see if there is a report in their system. Neither of these actions will impact an applicant’s credit score in any way.

Checking accounts allow you to access your money to shop, pay bills or withdraw cash from locations across the globe. They are well-suited to pay for your daily or recurring expenses. A regular savings account, on the other hand, offers the added benefit of earning higher dividends, or a compounded return on the funds you deposit over time. These dividends compound at intervals set by the financial institution, but usually occurs either annually, quarterly, monthly, or daily. (Quorum compounds dividends monthly.)

Savings accounts are, by design, not suited to pay for daily purchases. In fact, they are limited by federal Regulation D to no more than six withdrawals per month. If your monthly budgeting and bill payment plan requires multiple transfers each month from a savings account, or you believe you may routinely exceed six transfers per month, consider a checking account, or setting up multiple savings accounts.

Compound interest simply means earning interest on interest. When interest compounds daily, your interest is broken into 365 smaller payments. When it compounds monthly (Quorum compounds dividends monthly), it is paid in 12 payments. If interest is compounded daily, interest added on Tuesday will earn interest on Wednesday, and then the new amount will earn interest on Thursday—and so on. If interest is added monthly, the interest earned for a specific month will be paid once each month.

While it is true that the more often interest is compounded, the more you stand to earn, it’s important to remember that when looking at APY, you are looking at the annual yield, not the rate. That means, when you see a high-yield savings account that advertises 2.00% APY, you will have earned 2.00% on your balance by year end, whether it is compounded daily or monthly: APY is the equalizer and allows you to compare apples to apples.

When comparing a term (similar to a CD) and savings accounts, it helps to understand their differences by looking at factors including:

• Accessibility of funds: With a traditional savings account, your funds are liquid, meaning you have fast and flexible access to cash, whenever you need it (it’s important to note that withdrawals are limited to six times per month, per savings account, per Federal Regulation D; click to learn more about what qualifies as a withdrawal). However, with term accounts, you invest a specific amount of cash, for a particular period ranging from a few months up to five years or more. If you withdraw these funds before the end of this maturity period, you will pay penalties up to several months’ of accumulated dividends.
• Interest rates: Financial institutions set and adjust the interest rate in savings accounts over time as the Federal Reserve funds rate rises and falls. However, term accounts allow investors to lock in a fixed rate of return for a specific period (or the term) of the account. Generally, if you have a longer term and larger investment, you can secure a higher interest rate upfront.
• Initial deposit: Most financial institutions offer savings accounts with a minimal (under $100) initial deposit (Not HighQ; there is no minimum deposit for a Quorum’s high-yield savings account, HighQ!). Term accounts, on the other hand, often require initial funding in the neighborhood of several hundred or thousands of dollars.
• Account fees: Savings accounts rarely include maintenance fees (and if they do, they’re often avoidable if you use them as designed). Similarly, account fees for term accounts are not common. (However, don’t forget that you will pay a fee, or penalty, to withdraw funds from your term account before the end of the pre-agreed upon maturity period.)
• Adding funds: Savings accounts allow you to add funds at your discretion. This feature is especially useful if you wish to set up automatic deposits into the account each month (a great way to put your savings on autopilot). Term accounts, however, rarely offer consumers the ability to add additional funds. You add the required funds upfront, and then stand on the sidelines to watch them grow until the maturity date arrives, at which point you can either cash them in or roll over your funds to a new term account.

Yes, our iOS and Android mobile banking app allow you to pay your bills, view your savings account or checking account balances and history, send secure messages, and perform transfers, anywhere, anytime. Our mobile banking app also allows you to snap pictures of your check to make a deposit anywhere, anytime.

Download the Quorum mobile banking app today to get started!

Search for “Quorum” in the App Store or Google Play, to download our app directly to your mobile device.