Union Bank Savings Account Interest Rates – Choosing the right type of savings account can be confusing. Are you better off with a Certificate of Deposit (CD)? A traditional savings account? Money market account (MMA)?
These are all taxable accounts that you open at a bank or credit union, and they are protected by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). Each account has advantages and disadvantages, and the right choice for you will depend on how much money you have and your personal needs.
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Note that these are only average trends. The exact rate you get for each of these accounts depends on the issuing bank or credit union.
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These simple accounts are one of the most basic ways to bank your money. A savings account is a good choice for a young person’s first bank account or for someone who needs easy access to money.
Most banks do not require a lot of money to open a savings account. $25 is often enough and some accounts have no minimum opening deposits. You may need to maintain a minimum account balance to avoid monthly fees, which can range from $25 to $1,000 or more, depending on the bank and account. You may be given an ATM card to withdraw cash, but your bank or credit union may impose withdrawal limits and you should be careful not to go below the minimum balance requirement.
If you have your savings and checking accounts with the same bank, you may be able to transfer money between the accounts or use your savings account for overdraft protection. A linked savings account makes it especially easy to transfer money from savings. However, some banks and credit unions may charge a fee for such a transfer.
Depending on the account, you may not earn much interest – savings account rates are on average lower than most other savings vehicles.
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However, there are some exceptions. A high yield savings account (HYSA) usually offers a significantly higher interest rate. They are usually offered online only at banks, at rates that can even beat money market accounts. There are no federal restrictions on how many accounts or banks you use to store your money.
Banks and credit unions also offer another type of savings account, the money market account. MMAs are similar to traditional savings accounts, but offer higher annual percentage returns (APYs) on average.
However, there may be some catch. You may also need a larger deposit to open an account — $1,000 is common — and you may need to carry a higher balance to avoid fees.
Some money market accounts require higher balances to earn higher interest rates. Unlike traditional savings accounts, which often pay an annual interest rate, many MMAs have a tiered interest rate, with higher rates for larger balances. This makes them desirable if you can maintain a high daily account balance. The best money market account rates can be competitive with the best savings and CD rates.
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Money market accounts are not the same as money market mutual funds, which are a low-rate, low-risk type of investment vehicle.
MMAs allow users to write or withdraw checks from the account and use ATM cards for payments. However, because the institution may block your transactions and withdrawals, a money market account is less suitable for everyday spending than a checking account.
Money market accounts vary widely – you need to thoroughly review account terms and disclosures. MMA may not have tiered savings, minimum balances or monthly fees offered by your credit union or bank.
When you open a certificate of deposit account, you give the bank a sum of money for a specific period of time – as little as one month or as long as ten years, depending on your choice. On the maturity date, when the term ends, you can withdraw your funds and close the account or renew the CD at current rates.
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CD interest rates are generally higher than traditional savings accounts and MMAs. Therefore, CDs are desirable for savers who can invest large sums of money and do not need access to cash during the term of the CD. CDs are insured by the FDIC or NCUA up to $250,000.
However, there is a trade-off. You’ll usually face a hefty penalty fee for early withdrawals, usually several months’ worth of interest. You usually can’t add money after opening a CD, although some banks and credit unions offer CDs with this option.
The trade-off for these types of CDs is often lower interest rates and shorter options compared to accounts with competitive rates.
While many institutions offer CDs with minimum deposits of $0, the best CD rates can sometimes be found with institutions that require larger deposits, between $500 and $10,000.
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Like MMAs, CDs with higher balances can offer higher rates. CDs usually have a fixed interest rate, which locks you in to a lower APY if the overall rate goes up. But fixed interest rates also allow you to lock in a higher rate, which is valuable if the overall rate falls.
The specific bank and term length you choose can affect your interest rate. Shop around to find the best CD prices, which change frequently.
MMA and CD share some characteristics, but there are important differences. MMAs are similar to traditional savings accounts, but may require a larger deposit to open, such as $1000. You can add or withdraw your MMA. A higher minimum balance can help you avoid fees and get higher interest rates. Owners of CDs must leave their money untouched for a certain period of time and pay higher fees than MMAs. Early withdrawals from CDs usually carry heavy penalties, unlike MMA.
Money market accounts are good for those who have large sums of money to invest and those who want to access their money by check or ATM card. MMAs allow you to add money over time, increasing your savings. CDs may be better for those who don’t mind locking in a fixed investment for several months to several years in exchange for a fixed interest rate. CDs are useful when you’re saving for a specific, time-bound goal — like buying a car or home in 12 to 18 months.
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In general, money market accounts are more liquid than CDs. Of course, most CDs have early withdrawal penalties, while MMAs do not (however, some MMAs have withdrawal limits). That said, CDs often pay higher interest rates because your funds are pledged to that bank or credit union. Some penalty-free CDs come with no fees, but you may get a lower interest rate.
When deciding whether a traditional savings account, MMA, or CD is best for you, consider how much you can afford to deposit initially, how much access you need to your savings, and what how much do you want to earn with interest? Because of competition among financial institutions for investments, you may find higher rates in surprising places—whether on a CD, high-yield savings account, or money market account—and not necessarily at the bank or your credit union.
If you need money for bills or an emergency or if you want to add to your assets, a traditional savings account or MMA is the best option. If you can pay large sums of money without touching it for a long time, a CD might be a better option.
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Union Bank Savings Account offers its customers a wide range of savings accounts with various benefits. Today in this post we will talk in detail about the Union Bank savings account interest rates, the types of accounts offered by the bank and much more.
Union Bank of India offers various savings accounts to suit the needs of the customers. Below are some of the Savings Bank accounts offered by Union Bank:
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This is a basic savings account that does not require maintaining a minimum balance. The bank offers zero balance facility in this type of account. There are no charges for any banking services on this account. This account carries a wide range of banking facilities like cash deposit, cash withdrawal, free accident insurance ID provided through debit card, ATM card facility is provided. Any resident can open this account.
This savings account also benefits from the naming facility. the main book
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