Saving for Life's Unexpected Expenses 

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Why an Emergency Savings Fund is Essential

Life is unpredictable, and an emergency fund can help you navigate unexpected expenses without using high-interest loans or credit cards. Here are some reasons why an emergency fund is essential to overall financial wellness.

  1. Unexpected Expenses - Emergencies, such as medical bills, car repairs, or home maintenance, can arise at any time. Having a savings fund allows you to cover these costs without disrupting your financial situation.
  2. Job Loss - Losing a job can be financially devastating. An emergency fund can help cover living expenses while you search for new employment.
  3. Peace of Mind - Knowing you have a financial safety net reduces stress and anxiety, allowing you to focus on other aspects of your life.
  4. Avoiding Debt - Without a savings fund, you might have to rely on credit cards or loans in emergencies, leading to debt accumulation and interest payments.


Types of Saving Methods

There are various ways you can save money effectively. Choosing the right one depends on your goals, risk tolerance, and preferences. Here are some common saving methods.

Traditional Savings Accounts
Traditional savings accounts are offered by banks and credit unions, providing a safe place to store money with easy access. They typically offer lower interest rates compared to other savings methods but are highly liquid.

    • Pros - Easy access, FDIC insured, low risk
    • Cons - Low interest rates


High-Yield Savings Accounts
These accounts generally offer higher interest rates compared to traditional savings accounts. However, they are often available from banks that operate primarily online, adding some layers to the process. They are also FDIC-insured.

    • Pros - Higher interest rates, FDIC-insured
    • Cons - May have minimum balance requirements; many are online-only so funds could take several days to access.


Money Market Accounts
Money Market accounts combine features of savings and checking accounts, offering higher interest rates and check-writing capabilities.

    • Pros - Higher interest rates, check-writing privileges, FDIC-insured
    • Cons - Higher minimum balance requirements than traditional saving accounts.


Certificates of Deposit (CDs)
CDs are time-deposit accounts that offer higher interest rates in exchange for keeping your money locked in for a fixed term (ex. 6 months, 1 year).

    • Pros - Higher interest rates, predictable returns, FDIC-insured
    • Cons - Limited access to funds until maturity

Common Questions

Our interest rates for savings accounts depend on what type of account you choose and the amount of funds kept in your account. For the most up-to-date interest rates on UMCU's savings accounts, please visit our Rates page.

All members of UMCU are assigned a Savings Account because it holds your place at the credit union. You don't have to use it if you don't wish — you just need to keep the $5.00 minimum balance. 

Everyone's financial situation is unique so the best way for you to save for retirement depends on many factors! We encourage you to speak to one of our helpful and knowledgeable team members who specialize in retirement planning. Give us a call or schedule an appointment to learn more about UMCU's IRA accounts.

With terms as short as six months, you can grow your savings quickly and confidently — all while keeping things simple. Here’s how it works:

  1. Choose your term length (6 months to 5 years)
  2. Deposit as little as $500 in new funds
 

Earn interest, compounded monthly, and watch your savings grow!

Each UMCU savings product has a different minimum balance. For most accounts, the minimum balance is just $5.00!

Accounts with $5.00 Minimum Balance
  • Savings
  • Business Savings
  • Business Money Market Savings

Money Market Savings Account
  • $500.00 minimum balance to avoid monthly maintenance fee
  • $2,000.00 minimum balance to earn interest

Everyone who opens an account with UMCU has a savings account. The $5.00 minimum deposit holds your place at the credit union.

Who Qualifies?
  • Traditional IRA: Anyone who has earned income or whose spouse has earned income. 
  • Roth IRA: Anyone with earned income whose annual gross income is below $161,000 (single) or $240,000 (joint). 

Taxes
  • Traditional IRA: Tax-deferred investment; taxes come out at time of withdrawal. Possible tax deductions.
  • Roth IRA: Taxes are paid before contributing. Possibility of tax-free investment growth.

Annual Contributions: Maximum of $7,000. Contributions to a combination of Traditional and Roth cannot exceed $7,000. After age 50 you can contribute an additional $1,000 as a "catch up".

Mandatory Distributions:
  • Traditional IRA: Distributions must begin after you turn 73.
  • Roth IRA: No withdrawal requirements.

 

Sometimes! Generally, our savings accounts don't incur fees, but there are a few specific instances where a fee may be charged. Check out our fees and charges table to learn more.

You bet! Interest is deposited monthly and the more you save, the more you'll earn!

Though IRAs are a type of savings account, they are not exactly the same. Below are a few differences to keep in mind. 

Goals
  • Savings Accounts: Good for short term and emergencies
  • IRAs: Long term for retirement age

Funds
  • Savings Accounts: Stay as cash
  • IRAs: Invested in stocks, mutual funds, and ETFs

Limits?
  • Savings Accounts: No limit to contributions
  • IRAs: Yearly limits

Withdrawals
  • Savings Accounts: Funds can be withdrawn at any time
  • IRAs: Funds cannot be withdrawn until age 59 1/2 or you'll pay a penalty

Advantages
  • Savings Accounts: Holds cash deposits. May earn interest depending on the type of savings account
  • IRAs: Some tax advantages may apply depending on the type of IRA