Low interest rates are great if you’re buying a home or car. They’re not much help when you want your savings to grow. (That’s hard for a savings institution to say, but facts are facts!)

Which begs the question, what’s the point of old-fashioned savings accounts?

There are two points, actually: Security and access.

Savings accounts give you peace of mind.

Savings accounts are federally insured (by NCUA for credit unions, by FDIC for banks) up to at least $250,000 per individual depositor, per financial institution. That means no matter what happens to the financial institution you entrust your money to, your money is safe, down to the last penny.

Also, savings account balances only lose value when you withdraw funds. Each month your account earns interest that is compounded.

Savings accounts let you access your money anytime.

There’s no easier way to put money aside AND have it at practically at your fingertips than a savings account. If you need cash, there are ATMs everywhere—and if you need more than your daily ATM withdrawal limit, just make a trip to the nearest branch of your credit union or bank.

You DO have options.

Your standard credit union or bank savings account (perhaps with a linked checking account) is a safe, secure, accessible vehicle for managing your day-to-day, month-after-month finances. But if you have larger sums to save, your choices get more rewarding:

Money Market Accounts (or Money Market Deposit Accounts) are a great place to park larger sums of cash, while being able to access it quickly—for rainy day needs or a special occasion purchase. They offer somewhat higher rates of return if you maintain higher minimum balance requirements.

They’re federally insured when provided by credit unions or banks, and won’t lose value if the financial markets slip. Accessing your money is easy—just write a check or swipe the account’s debit card. HOWEVER, you are limited to six withdrawals per month.

It’s important to note that Money Market Accounts are different from Money Market Mutual Funds, which are not insured, but are subject to the ups and downs of the financial markets.

CDs (Certificates of Deposit) are basically “set it and forget it” savings vehicles that earn higher interest the longer you commit to keeping your money on deposit. Terms typically range from 6 months to 5 years—typically, the longer the term, the higher the expected minimum deposit. If you withdraw funds before the term of your CD expires, you’ll have to pay substantial penalties. CDs are federally insured.

As you shop for a place to save your money, be sure to check out Pen Air’s choices. Because we’re a member-owned credit union, we can typically offer higher rates of return.