Is it possible to earn 3% on your savings account without jumping through hoops?

If you are a big fan of big banks, you will no doubt love the interest they pay on your savings account (0.01%)! But then, let’s also be fair. The interest paid by banks are paltry across the board, not just the big banks.

Then there are some banks that offer an above average interest on your savings account, if you maintain a 5 figure balance! Some banks offer 1% without crazy conditions and this is still better than the average, but now a Credit Union has come forward offering a 3% interest on your primary savings with a modest $5 minimum on your first $500!

Now compare this to what other banks offer:

  • Bank of America – 0.01%
  • Chase – 0.01%
  • HSBC – 0.01%
  • Wells Fargo – 0.01%

* Savings rates for the State of California

If I didn’t own a blog, I would be shouting on top of my roof! But thankfully, there are most civilized ways to get the message across!

What's the catch?I can hear you saying…sooo what’s the catch? Since I’m already a member of this credit union, I looked. There really isn’t any. No periodic direct deposits needed, no monthly fees, no requirement to use your ATM/debit card a certain number of times, nothing out of the ordinary!

You can have only one primary account and the interest will drop to 0.05% for balances above $500. (Still a better deal than 0.01%)! This is a credit union and there will be an eligibility requirement, but you can set this up online. I don’t even live in the same state where this Credit Union is located!

DCU 3% Savings Account

Great way to jumpstart your emergency fund!

If you don’t have one already, may be this could be the spark plug to get started! Why let your emergency fund sit in an average savings account earning practically nothing (0.01%) when you could put it to work for 3%? Remember, the really smart folks think in percentages! Be one!

And if you must know, I’m not getting compensated to get the message across! The links are not affiliate links and I’ve been with this credit union, DCU since 2000 and have only good things to say about them.

What interest are you earning on your savings account?

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23 thoughts on “Is it possible to earn 3% on your savings account without jumping through hoops?

  1. That’s a great find (3% on savings accounts). I’ve been unable to find anyone at higher than 1%, and I was pretty happy to find that 1% at a local credit union I could join. (yes, it does require 5 figures in the account, but I’m using it to store my emergency fund, so that is doable).
    The better part was the CD rates they offer. a 2 year CD at 2.25%! That is still not great, but it’s available at lower deposit requirement than the saving account (4 figures instead of 5) and it’s enough to (almost) keep up with top line inflation.
    Downsides of CD’s still apply. Still, I haven’t seen hardly anything for CD or money market rates over 2% in a long time. Here’s hoping the recent rate climbs will herald more and (maybe) better deals!

  2. Excellent find! Currently I use ING which gives me (I think) 0.75% interest on my savings. Which is not great, but better than the minuscule amount that I get at Wells Fargo (where I keep my checking account). What I really like about ING is the ability to create different savings accounts… it is great for keeping track of different goals!

  3. That sounds like impossible in these days. But you made me think and check what CUs are around in my state. Currently I use Sallie Mae for my emergency savings with 0.90%
    Hopefully I will be able to find a CU offering a batter rate.

  4. Too bad the 3% is limited to the first $500. But, 3% on $500 is better than the virtual 0% interest rate that the majority of banks are paying these days.

  5. Don’t get discouraged if the first (few) credit unions you find do not have decent rates. Credit unions are strange animals with rates all over the place. The one through my company offers above market loan rates and market savings rates (I can’t honestly imagine why anyone would use them). It was through some luck that the 8th credit union I researched near me (only third I was eligible for) had the decent rates.

    If you find a good credit union but are not eligible, go in and ask them what ways you may become eligible. There may be a Backdoor through friends, family or club organizations.

  6. I use ING direct, which in Canada has an interest rate of about 2% at any given time.

  7. Wow 3% is nice, too bad it’s only for the first $500 though. I use Ally bank and my money is in a no-penalty withdrawal CD which has a interest rate of 0.90%. The online banks offer much better rates so I stick with them.

  8. It’s rare to see 3% these days. Wish they allowed for funds under the 3% savings.

  9. I have a few Ally Bank CDs from a few years ago with a 3% rate and tiny early termination fee. But I’m looking at credit unions as a switch from the big bank where I do most of my banking. Amazing how little interest is paid on “high interest savings” accounts at many of the banks…

  10. Now that you mention it, I have no idea what my saving’s account interest rate is. I assumed it’s basically zero, I guess, so I never really looked haha. 3% is crazy and I’m seriously wondering how they can pull that off with how low interest rates are.

  11. There is a catch. The catch is that the rate only applies to $500. That means you will make at most $15 per year from the account. It’s essentially 3% APR, too, since the interest earned would be over the $500 and thus compound at only 0.05%. You could transfer the interest out every month, to someplace with a 0.75% or 0.9% interest rate; it’s up to you if your time is worth transferring $1.25 out of the account every month to squeeze a few extra cents.

  12. Credit unions often seem to offer the best deals. I’ve been thinking more and more about looking into one. I’ve had my emergency savings in a CapitalOne account for years because when I first opened it, it had a really good interest rate as long as you kept the balance over $2,000. Well, eventually I needed to raid the account for something and the balance dropped just under $2,000. Even after I got it back up, that magical interest rate never returned. So I guess it’s time to find a new bank.

  13. Credit unions are definitely the way to go. I’m earning next to nothing on my savings account, but I keep next to nothing in there so I don’t get to worried about it.

  14. I wish the 3% was on more than the first $500. As you say, it’s a good incentive, for those who need it, to start an emergency fund. You can get 3% on $1k or more if you are willing to tie the money up in a 5-year CD with PenFed credit union. The penalties for early withdrawal are kind of high, at 365 days of lost interest.

  15. Wow that’s a good deal. I’d pay 5 bucks for that. My banks rates are part of the pathetic 0.01% bunch. Credit unions are a great alternative to mainstream banks.

  16. That is hard to believe, given current market rates. Impressive! I expect during the next few years that interest rates are going to float up.

  17. I’m getting a whopping .01% from a big bank. What a great find at the credit union. Thanks for sharing MC!

  18. I use a local credit union for our checking account, I really like them. For our emergency fund savings we are with Capital One 360 which is only offering .75% interest. I’ve seen deals like this one before, but 3% on $500 would not entice me to open a new account.

  19. It’s too bad that comparing rates with credit unions is so difficult and vary so much: 1.75% maximum rate on CD 3.25% on rewards checking 1.5% on jumbo CDs 0.85% on CDs
    And then to get an idea of how many there are, here’s a list of FCU’s in the small state of Louisiana:

  20. I’m still getting substantially below 3% on my cash. I try to maintain a minimal cash balance precisely given how poor the returns are.

  21. 3% is a great find. Great job!

  22. If high ROI for the lowest risk possible is the financial objective, high yield credit union savings accounts is not necessarily the only answer. Moreover, for those with brokerage accounts, investment grade international bond funds may provide an even higher yield for relatively low risk.

  23. Pretty Good banking option my friend, its always nice to have an emergency fund earn a little something.

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