The IFCU Blog

Looking to grow your savings without the risk of investing?

A high-yield savings account is a type of account that offers significantly higher interest, often referred to as annual percentage yield (APY), than traditional savings accounts.

These accounts are great for anyone looking to grow their savings without the risks tied to investments. Whether you're setting aside funds for a down payment, building an emergency fund, or building a health savings account, it offers a smart, low-risk strategy.

Why Choose a Credit Union for a High-Yield Savings Account

Where you open your savings account matters. While traditional banks are the default for many, member-owned credit unions often deliver stronger returns. Credit unions focus on providing better value, like higher interest rates, lower fees, and flexible account features, to help you reach your savings goals faster.

High-Yield vs. Traditional Savings Accounts

Traditional savings accounts typically offer low APYs, meaning your money grows slowly, even with a high balance. Some accounts include maintenance fees or strict minimum balances, which can eat into your earnings. In contrast, yield-focused accounts, especially those from credit unions, offer much higher returns with fewer limitations. Many also include flexible deposit options and little to no fees, making it easier to build your savings efficiently.

At Industrial Federal Credit Union, we offer a high-yield savings account called the funds manager savings account. This is sometimes referred to as a money market account in the financial industry. The funds manager account offers tiered dividends based on what you deposit. The larger your balance, the higher your dividend.

Why Credit Unions Offer Better Rates and Lower Fees

Credit unions are cooperative financial institutions that operate on a not-for-profit basis, which means their profits are reinvested in the members, not distributed to shareholders. This structure allows credit unions to offer more competitive savings rates and lower fees across the board.

Unlike large banks that must generate profits for shareholders, credit unions are structured to serve their members. This means earnings are reinvested into better account features, like higher annual percentage yields (APYs), enhanced digital banking tools, and reduced service charges. These differences over time can significantly increase your savings.

Whether it’s a high-yield savings account or a funds manager account, credit unions often outperform banks when it comes to value. You’ll also find more forgiving account terms, like lower minimum balance requirements and fewer service charges.

Key Benefits of Credit Union High-Yield Savings Accounts

A credit union savings option with high returns offers real advantages, especially if you're focused on long-term growth. From low fees and relaxed deposit requirements to better service and stronger community ties, these accounts are built to support your financial goals while delivering more value per dollar saved.

Lower Fees and Flexible Requirements

One of the biggest perks of traditional credit union savings accounts is affordability. Many waive monthly fees altogether and require only a modest starting amount, sometimes as low as $5. Unlike many banks that penalize you for low balances, credit unions are more flexible, making it easier to keep more of what you save.

If you are ready to advance to a funds manager savings account, you’ll enjoy other perks such as the tiered dividends, Free digital banking services, including: free online banking, free mobile banking and free eStatements, plus access our protection, privilege, and insurance options.

Personalized Member Service and Local Support

Credit unions are built around member service. Instead of focusing on profits, they prioritize personalized support and financial guidance. Staff are often more accessible, helping you choose the right savings product for your needs. Plus, your deposits often support local initiatives, so you earn more while giving back to your community.

How to Get Started: Choosing the Right Credit Union

When choosing a credit union, consider factors like digital banking access, branch locations, APY rates, membership requirements, and how their account options align with your financial objectives. 

Membership Eligibility and Requirements

The first step in opening a credit union account is becoming a member. Unlike banks that serve the general public, credit unions typically have eligibility criteria based on location, employer, school affiliation, or membership in a community group. But don’t worry, at Industrial Federal Credit Union, joining is easy. We are a diverse group of 30,000+ members and we want you to be one of them! Becoming a member is easy. 

Steps to Open an Account

Here’s how to open your account in a few easy steps:

1. Confirm your eligibility and become a member, usually by opening a basic savings account.

2. Choose the right savings product based on your goals: high-yield, funds manager account, or health savings.

3. Fund your account with a minimum deposit via transfer, check, or direct deposit.

4. Set up automation tools to stay consistent with your savings.

Industrial Federal Credit Union is federally insured by the National Credit Union Administration (NCUA), so your funds are protected as they grow.

Tips for Long-term Growth

Once your account is open, how you manage it makes all the difference. Here are a few ways to maximize your savings.

Automate Your Savings

One of the easiest and most effective ways to grow your savings is to automate it. Automatically route part of your paycheck into your savings account, or schedule automatic transfers from your checking account. This "set it and forget it" approach ensures you consistently contribute to your savings goals without needing to think about it. Plus, regular deposits can unlock better competitive dividend rates over time.

Minimize Withdrawals

High-yield accounts work best when your money stays put. While these accounts often allow for some liquidity, frequent withdrawals can limit your earnings. To avoid setbacks, use your high-yield account strictly for saving, not spending.

Set and Track Savings Goals

Having a clear purpose for your savings can keep you motivated. Whether you're building a cushion for emergencies, saving for a down payment, or funding a health savings account, defining your targets helps you stay focused and intentional. Industrial Federal Credit Union offers online banking tools and mobile apps that let you set, track, and adjust your goals in real time.

By combining smart habits like automation, discipline, and goal setting, you can fully capitalize on strong returns and grow your savings more efficiently than with a traditional savings account.

Monitor Your APY Regularly

APYs can change over time, especially with shifting interest rate environments. It’s a good idea to review your account’s rate to ensure you're earning an above-average return. 

What Makes a Great High-Yield Account?

The best savings accounts combine a high APY with low minimum deposits, no monthly fees, and strong digital tools. Look for accounts that are federally insured and offer flexible access to your funds. Credit unions that meet these criteria are often the best choice for consistent growth and financial peace of mind.

Final Thoughts

A dividend savings account from a credit union is one of the simplest, most effective ways to grow your money, without the risks of investing. With higher returns, fewer fees, and personalized, member-first service, credit unions offer more control and better value for every dollar saved.

If you're ready to take the next step, explore options from Industrial Federal Credit Union. Whether you're just starting out or looking to boost your existing balance, the right account can help you reach your financial goals faster, beginning with your next deposit.