I’ve written about all of the 5% interest accounts I use and rounding out my list of 5% interest savings accounts is Service Credit Union. It’s the last mega-high-yield savings account I haven’t written about yet.
What makes Service Credit Union useful is that they offer 5% interest on up to $500, plus 3% interest on up to $3,000. In addition, Service Credit Union doesn’t have any monthly fees or minimum balance requirements to worry about. That makes Service Credit Union a useful place to store part of your emergency fund. If you combine Service Credit Union with the other available 5% interest savings accounts out there, you can put away a decent chunk of money earning between 3-6% interest.
That’s exactly what I’m doing. Between me and my wife, we currently have $29,000 set aside in FDIC-insured savings accounts earning 3-6% interest. It’s a good emergency fund to have. And I feel good keeping it in cash because it’s still earning a good interest rate.
In this post, I’ll go over what Service Credit Union is and how their savings accounts work. I’ll also go over how to open your Service Credit Union accounts and incorporate them into your emergency fund strategy. At the end of this post, I’ll recap all of the other 5% interest accounts so you can create your own mega-high-yield emergency fund.
Another thing to note. Right now, Service Credit Union is offering new members a $100 signup bonus when you open a new Service Credit Union checking account. The checking account is free, so you should definitely take advantage of this. To earn the $100 signup bonus, you’ll need to open a checking account and fund it with $100. Be sure to use this link to open your account (this is not a referral link).
What Is Service Credit Union?
Service Credit Union is a credit union based in New Hampshire. While they are located in New Hampshire, they are open to members nationwide.
In the past, Service Credit Union was limited to New Hampshire residents unless you got a free membership to the American Consumer Council. This was an added step in the signup process, and I guess they realized it wasn’t worth dealing with since the American Consumer Council membership effectively made the account available nationwide.
Since it’s a credit union, your funds are insured by the National Credit Union Administration. This is effectively the credit union version of the FDIC. The short of it is that funds are federally insured in the same manner as any other bank.
The only other thing to note is that credit unions work under an ownership system in which account holders own a small piece of the credit union. It’s similar to owning stock in a company. In practical terms, what this means is that when you fund your savings account, you’ll notice that $5 of your deposit is not available for withdrawal. This $5 is your ownership stake in the credit union.
With all that said, let’s get into the important features of Service Credit Union.
Service Credit Union 5% Interest Savings Account
The main useful feature of Service Credit Union is its 5% interest savings account. Service Credit Union calls this account the Primary Savings account.
The limitation here is that you only earn 5% interest on your first $500 in the account. Everything above $500 earns 0.25% interest. So, if you have $1,000 in the account, you would earn 5% on $500 and 0.25% on the remaining $500. Because of this, it’s best to keep your Primary Savings account as close to $500 as you can.
Interest is paid monthly, with interest posted on the last day of each month. It’s not a big deal to leave the interest in your account, but since I’m an optimizer, I typically withdraw the interest each month (it takes me about 10 seconds to do this).
Ideally, if you’re a two-person household, you want both members of your family to open a Service Credit Union account. That way, each of you can put away $500 earning 5% interest (or $1,000 total between the two of you).
As I mentioned at the beginning of this post, Service Credit Union does not have any monthly fees to worry about. One thing a reader did point out is that there is an inactivity fee if you have no activity in your accounts for 12 months. To avoid this, you could either automate a small transfer each year or the easier thing to do is probably to withdraw the interest you earn at least once per year. I withdraw my interest every month, so I’ve never had to worry about an inactivity fee since there’s always one transaction per month in my account.
Service Credit Union 3% Holiday Club Savings Account
In addition to the 5% interest account, Service Credit Union also offers a 3% savings account that they call the Holiday Club savings account. While it’s labeled as an account to save for the holidays, there isn’t any requirement to use it for holiday shopping and you don’t have to withdraw any money from your Holiday Club account or do anything else to earn the 3% interest.
The limits for the 3% interest account are better than the 5% savings account. You can earn 3% interest on up to $3,000. Everything above $3,000 earns 0.25% interest. So like the 5% interest account, your best bet is to keep it as close to $3,000 as possible. Interest is paid at the end of each month, so like with the 5% savings account, I withdraw the interest I earn each month.
Ideally, you want to open both the 5% Primary Savings account and the 3% Holiday Club savings account. That’ll give you $3,500 earning a good interest rate. If your spouse or partner can open their own account, you’ll have $7,000 set aside earning a good rate.
How To Open Your Service Credit Union Accounts
The process for opening your Service Credit Union account is fairly simple but does have some confusing parts that you’ll need to understand. Here’s how it works.
Note that I opened this account several years ago, so it’s possible some of the steps have changed slightly, but the general process should still be the same.
- This first step is optional now, but you can do it if you want to be extra careful. In the past, Service Credit Union was not available nationwide, so you had to join the American Consumer Council (ACC), To join, go to the ACC membership website. Enter the code “consumer” in the membership code section for a free membership (if “consumer” doesn’t work, then try entering the code “service”). You’ll then get an email with your membership certificate.
- Next, go to the Service Credit Union website, click the “Open Now” box, and then click “New Member Account.” This link also comes with a $100 signup bonus if you open a checking account and fund it with $100. So make sure to open your Service Credit Union accounts from that page.
- Under “Select Your Eligibility,” click the box that says you are a member of the American Consumer Council. Then enter your ACC membership number found on the membership certificate that was emailed to you. (You might not need to do this step anymore, but I’m leaving this step here just in case).
- Under required products, choose Primary Savings. You should also open the Holiday Club Account, which offers 3% interest on up to $3,000. To earn your $100 signup bonus, you should also open the free Everyday Checking account. If you’re keeping track, you should be opening three different accounts – a checking account, a 3% interest savings account, and a 5% interest savings account.
- On the final application page, you can upload documents before submitting your application. The documents you’ll want to upload are (1) your ACC membership certificate, (2) a picture of the front and back of your driver’s license, and (3) something to verify your address, such as a utility bill or home insurance policy. You don’t have to do all of this at this point in the application, but if you don’t, you will receive an email from someone at Service Credit Union asking you to send them this information before your account can be approved.
- Even if you upload all of the required documents, you may still get an email from the membership department asking you to send them these documents. Just keep an eye out for this email and send any documents as requested.
- Once approved, you’ll get a welcome email with your member number. To set up online access, go back to the main Service Credit Union website and sign up for online banking. To sign up, you’ll need your member number and your “Call 24” pin. Your PIN is the last four digits of your SSN. Once you enter this info, you’ll be able to set up your username and password to access online banking.
That’s it! It’s not too difficult. Just remember to open the checking account also so you can earn the $100 signup bonus. And as I mentioned, Service Credit Union recently made membership available nationwide, so the steps about joining the American Consumer Council might not be required anymore. I’d still recommend joining it since you can do it for free, just in case you need it.
Creating Your 5% Interest Emergency Fund
I’ve written about all of these different 5% interest savings accounts and how I use them to create a large emergency fund. Below is a list of all the different savings accounts I have and how much money I have in each one. As you can see, I’ve maxed out each account for me and my wife, giving us a $29,000 emergency fund earning 3-6% interest.
Here’s a list of the other posts I’ve written about each individual account. It’s worth checking all of these posts out if this is something you’re interested in doing too.
- Netspend Account: The Ultimate Guide to a 5% Interest Savings Account
- DCU $20 Referral Bonus – Step By Step Guide (Plus A 6% Interest Savings Account)
- The H-E-B Debit Card 6% Interest Savings Account
- Workers Credit Union Savings Account – Earn 3.56% Interest On Up To $1,000
- Current Bank App – A 4% Interest Savings Account On Up To $2,000
DCU, Workers Credit Union, and Current require almost no work to set up or maintain. Netspend and the H-E-B Debit account require some upfront work, but once you have everything set up and automated, they run themselves.
To some, it might seem confusing to have so many different accounts. I personally don’t think it’s confusing at all. Since it’s an emergency fund, I don’t have to touch it often. And instead of seeing these accounts as multiple separate accounts, I think of them as one big pile of money for my emergency fund.
In conclusion, Service Credit Union is an easy, low-maintenance 5% interest savings account that’s worth taking advantage of. The account is free with no monthly fees to worry about, so once you put your money in the account, you can leave it there and not worry about maintaining it. All you’ll need to do is make one transaction per year in one of your accounts to avoid any potential inactivity fees (easily done by withdrawing your interest at least once per year).
Plus, Service Credit Union is currently offering a $100 signup bonus, which makes this a no-brainer account to open.
For more information about my emergency fund strategy, check out these posts, where I go over how my emergency fund works.