Benefits of Automated Savings Accounts with Credit Unions

Saving money takes dedication and discipline, and when you make saving a priority, you set up your future self for success. If you find it difficult to intentionally stow away money or you simply want to achieve a head start on your savings, automatic savings programs offered by credit unions might just become your new best friend.

Putting time and effort into saving money manually requires overcoming mental resistance. It’s always easier to keep the status quo of spending whatever money you have available. Yet by automating the process of saving money, you take this resistance out of the equation and remove a barrier to achieving financial success.

Read on to learn more about utilizing credit unions to automate your savings and how to start growing your rainy day fund.

How Automatic Savings Programs Work

If this concept is brand new to you, don’t worry: an automatic savings account is exactly what it sounds like. These programs allow you to set up a system where your money automatically deposits into a specific account designated for savings with no extra effort on your part.

Instead of having to calculate how much you’d like to deposit each time you earn money, an automated program handles all the work for you behind the scenes.

Automated Savings Account Considerations

Once you set up your automatic savings plan, you can largely forget about it and watch your financial funds accumulate over time. But first, you need to nail down these key elements:

Choosing the desired savings amount – How much money do you want to deposit into your account each time the automated process occurs? Do you have an end goal for a total amount you wish to accumulate, or a specific trip or project you’re saving up for? Answer these questions before setting up your account.
Evaluate your options for savings accounts. Compare the options available or discuss them with a credit union staff member. Is there a minimum account balance required for certain accounts? Will a particular account earn a higher rate of return? Can you utilize more than one savings tool? Some credit unions even offer a “round up” program, where your checking purchases are rounded up to the nearest dollar and the difference is deposited to a designated account. It doesn’t get more automated than that!
Frequency of automatic transfers – Decide how often you’d like the system to transfer money into your special savings account. This could be once a week, twice a month, or any increment of time you think works best. Most employers now utilize direct deposit for paychecks and may also allow you to designate a portion of your earnings to be deposited to savings versus checking account.
Linking accounts and authorization – Make sure you select the proper bank accounts to withdraw and/or deposit from so your saving process can be automated smoothly.

The beauty of easy savings methods like this one is that the power lies in your hands. You have control over how much and how often you save. You also retain the flexibility to switch up your system at any time to optimize it for your needs.

Benefits of Automatic Savings Programs

Utilizing an automatic savings account makes it easy and convenient to create a reserve fund or emergency savings account. Instead of completing manual transfers over and over, you can create a consistent, predictable system and potentially even enjoy higher interest rates.

To enjoy even more perks that will help you save faster and more efficiently, set up your program through a local credit union and utilize other services there as well.

There’s a good reason why more than 122 million Americans are members of credit unions. They are safe, trusted, community-oriented organizations that can offer more unique advantages than traditional banks, such as competitive rates on savings, due to their nonprofit status. And you can find the right credit union for you with CUSelect.

Selecting the Right Credit Union for Automatic Savings

Personal finance management can be a tough task to take on all alone. So, how do you find the right partner for your saving journey? When searching for the ideal credit union, it’s important to: