Credit unions do offer high yield savings accounts, but not all of them do, and the rates vary widely by institution

Credit unions are member-owned financial institutions, and some use that structure to offer savings rates competitive with online banks. However, credit unions are not required to offer high yield savings accounts, and many smaller ones do not. The ones that do typically call them "high yield savings" or "money market" accounts, though the naming varies. Your rate depends entirely on which credit union you join and which account you choose — there is no single credit union rate the way there is a federal funds rate.

The key difference between a credit union high yield savings account and a bank version is access. You can only open a credit union account if you meet their membership requirements, which usually means living or working in a specific area, belonging to an employer or organization, or having a family member who is already a member. Once you are in, the account itself works the same way: you deposit money, earn interest monthly, and can withdraw without penalty.

Key Takeaways

  • Credit unions that offer high yield savings accounts typically require you to meet membership criteria first, such as living in a certain county or working for a specific employer.
  • Rates at credit unions with high yield savings accounts vary by institution and change over time, so you need to check your local credit union's current rate before comparing.
  • Credit union savings accounts are insured up to $250,000 per account owner through the National Credit Union Administration (NCUA), the same protection as FDIC insurance at banks.
  • Some credit unions offer high yield savings only to members who also maintain a checking account or meet a minimum balance requirement.

How to learn about your credit union offers high yield savings

Start by contacting the credit union where you already have an account, or the one you are considering joining. Ask directly: "Do you offer a high yield savings account?" and "What is the current annual percentage yield (APY)?" Many credit unions list this information on their website under savings accounts or money market accounts.

If your current credit union does not offer high yield savings, you have two paths. You can look for a different credit union that does — use the CO-OP Network or Shared Branch locator to find credit unions near you and call to ask about their rates. Or you can keep your credit union checking account and open a high yield savings account at an online bank, which typically have no membership requirements and higher rates than most credit unions.

Membership requirements you may encounter

Credit unions restrict membership based on what is called a "field of membership." Common restrictions include living or working in a specific geographic area (a county or city), working for a particular employer, attending a certain school, or belonging to an organization like a union or professional association. Some credit unions have expanded their field of membership to include family members of existing members, which can be your easiest entry point.

Once you meet the membership requirement, you can open any account the credit union offers, including high yield savings. Some credit unions require you to open a checking account first or maintain a minimum balance in checking to access the high yield savings rate, so ask about any conditions when you inquire about rates.

How credit union rates compare to online banks

Credit union high yield savings rates are typically lower than rates at online banks. As of early 2024, online banks frequently offer rates above 4.5%, while credit unions with high yield savings accounts often range from 3% to 4.5%, though this varies. The difference exists because online banks have lower overhead costs and can pass savings to depositors, while credit unions operate as nonprofits and may prioritize lending to members over maximizing deposit rates.

However, some credit unions do match or come close to online bank rates, particularly larger ones or those in competitive markets. The only way to know is to check your specific credit union's current rate and compare it to online options. Rates change frequently, so a credit union that was uncompetitive six months ago may have raised its rate since then.

NCUA insurance and account safety

Credit union savings accounts are insured by the National Credit Union Administration (NCUA) up to $250,000 per account owner per institution. This is equivalent to FDIC insurance at banks. If the credit union fails, your deposits up to $250,000 are protected. You can hold multiple accounts at the same credit union — a checking account, a savings account, and a high yield savings account — and each is insured separately up to $250,000.

Before opening an account, confirm that the credit union is NCUA-insured. Nearly all federally chartered credit unions are, but some state-chartered credit unions may carry different insurance. The credit union should display the NCUA logo on its website or in its branch.

Withdrawal rules and account features

Credit union high yield savings accounts typically allow six withdrawals per month without penalty, though some allow unlimited withdrawals. Federal rules previously capped withdrawals at six per month, but that rule was suspended in 2020 and has not been reinstated. Individual credit unions set their own limits now, so check the account agreement before you open.

Most credit union high yield savings accounts do not charge monthly maintenance fees, but some require a minimum opening deposit (often $25 to $100) or a minimum balance to earn the advertised rate. Read the account disclosure document — the credit union must provide this before you open the account — to understand any fees or conditions.

When a credit union high yield savings account makes sense

A credit union high yield savings account is worth considering if you already have a membership or can easily meet the membership requirement, and the credit union's rate is competitive with online banks in your area. It may also make sense if you prefer banking in person or want to keep all your accounts at one institution.

If the credit union's rate is significantly lower than online options, or if you cannot meet the membership requirement, an online bank high yield savings account will likely serve you better. You can also split your savings: keep a smaller emergency fund at your credit union and put larger amounts in a higher-yielding online account.

Frequently Asked Questions

Can I open a credit union high yield savings account online?

Some credit unions allow you to open accounts online if you meet their membership requirements, while others require you to visit a branch or mail in paperwork. Call your credit union to ask about their process. If you cannot visit a branch, an online bank may be more convenient.

What happens to my rate if the credit union lowers it?

Your rate will change to match the new rate the credit union sets. Credit unions can change rates at any time without notice, just as banks can. If rates drop significantly, you can move your money to a different institution, though you may want to wait to see if rates rise again before switching.

Can I have both a credit union savings account and an online bank savings account?

Yes. You can hold accounts at multiple institutions. Some people keep a smaller amount at a credit union for convenience and a larger amount at an online bank for a higher rate. Just remember that NCUA insurance covers up to $250,000 per institution, so amounts above that at any single credit union are not protected.

Do I need good credit to open a credit union high yield savings account?

No. Credit unions do not typically run a credit check to open a savings account. They may check ChexSystems, a banking history database, to see if you have had problems with previous accounts, but a savings account does not require a credit decision the way a loan does.

What if my credit union does not offer high yield savings?

You can ask the credit union if they plan to add this product, but there is no may provide. Your other option is to open a high yield savings account at an online bank while keeping your credit union checking account. Many people use both for different purposes.