Credit Unions Pay You More… Here’s How
You work hard for your money. So when it comes to saving, you want to make sure your money is working just as hard for you. But if your savings account is with a traditional bank, chances are you’re not earning as much as you could be.
Here’s the good news: Credit unions like Freedom Credit Union typically offer higher dividends on savings compared to the interest rates you’ll find at traditional banks. That means your money grows faster without you having to do anything extra.
If you’re wondering why credit unions pay more and how to take advantage of it, read on. We’re breaking it down in a simple, no-jargon way so you can make the most informed decision about your savings.
What Are Dividends (and How Are They Different from Interest)?
Let’s start with a quick definition.
At a bank, you might earn interest on your savings. At a credit union, you earn dividends instead. Both are ways of rewarding you for keeping your money in an account, but the terms reflect the difference in how these institutions operate.
- Banks are for-profit businesses. They pay you interest (often a very small amount) based on your balance, but their priority is generating profits for shareholders.
- Credit unions are not-for-profit financial cooperatives. That means you are a member-owner. So instead of sending profits to shareholders, credit unions return earnings to members through higher dividends, lower loan rates, and fewer fees.
Simply put, you get more because you own more of the relationship.
Credit Unions vs. Banks: A Look at the Numbers
According to the National Credit Union Administration (NCUA), credit unions regularly offer better rates on deposits. In fact, recent reports show that the average annual percentage yield (APY) for savings accounts at credit unions is consistently higher than what traditional banks offer.
For example:
| Account Type | Avg. APY at Credit Unions | Avg. APY at Banks |
|---|---|---|
| Regular Savings | 0.26% | 0.20% |
| 1-Year Certificate | 1.51% | 1.27% |
| 5-Year Certificate | 2.10% | 1.80% |
Source: NCUA Q4 2024 Rates
These differences might not seem huge at first glance, but over time, they really add up.
- At a 0.20% bank APY, you’ll earn about $101.
- At a 0.26% credit union dividend rate, you’ll earn about $132.
Let’s say you keep $10,000 in a savings account for 5 years:
That’s $30 more, just by switching to a credit union savings account. And with higher-yield options like share certificates or money market accounts, the gap widens even more.
Why Credit Unions Can Offer Better Rates
So, how can credit unions afford to pay higher dividends?
It comes down to structure and values.
- We keep it local. Because credit unions like Freedom Credit Union focus on serving our community in Utah, we don’t have to support a massive corporate structure. That keeps our costs down and our member benefits up.
- Credit unions are owned by members, not shareholders. That means we return profits to you in the form of better rates and lower fees.
- We’re not-for-profit. Our goal isn’t to maximize earnings… it’s to serve our members and help you reach your financial goals.
It’s Not Just About the Rate
While earning more on your savings is a big perk, it’s not the only reason to choose a credit union. Here’s what else you’ll get when you bank with Freedom Credit Union:
1. Personalized Member Service
We know your name. When you call or visit, you’re not just an account number. You’re a neighbor, a friend, and a valued member. Our team is here to answer your questions, help you plan for the future, and support you through every financial milestone.
2. Lower Fees
We believe your money should stay where it belongs… in your account. That’s why we keep our fees low (and often eliminate them altogether). From free checking accounts to low-cost loan options, we’re always looking for ways to save you money.
3. Financial Education and Guidance
Whether you’re just starting to build your savings or looking to diversify with higher-yield options, our team can help. We offer tools, resources, and friendly advice to help you make smart financial choices at every stage of life.
4. Community Commitment
When you bank with us, you’re investing in your community. Freedom Credit Union is proud to support local causes, events, and families right here in Provo and Springville. You’re not just growing your savings, you’re helping others too.
How to Start Earning More on Your Savings
Ready to put your money to work? It’s easy to get started with Freedom Credit Union:
1. Become a member. Creating an account is easy.
2. Open a savings account. We offer several options depending on your needs, including regular savings, money market accounts, and share certificates.
3. Start saving and watch it grow. With competitive dividend rates, you’ll start earning more right away.
Want to compare your options or ask a few questions first? Our team is here to help. Whether you prefer to visit a branch, call, or explore online, we’ll make the process easy and hassle-free.
Final Thoughts: Small Changes, Big Impact
Switching where you save might not seem like a big deal, but over time, the right account can make a significant difference in your financial health.
By choosing a credit union like Freedom Credit Union, you get:
✅ Higher dividends
✅ Lower fees
✅ Better service
✅ A stronger local community
If you’re ready to earn more and worry less, we’re ready to help.
Let’s Grow Your Savings Together
Your money should work as hard as you do. At Freedom Credit Union, we’re here to help you grow your savings with competitive dividends, personalized support, and a team that puts you first.
Early withdrawal penalties may apply and could reduce earnings. Minimum deposit requirements apply. Contact us for current APYs and terms.
Federally insured by NCUA.
