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The Ladder of Savings

Aug 22, 2019


A recent study by shows that nearly 30% of Americans have Couple planning for retirementmore credit card debt than emergency savings. Let’s take steps to change that! With attention, consistency, and some simple guidelines, you can build a solid savings plan right here at Redwood Credit Union.

Step 1: Your Savings Account

This is the account you first opened when you joined RCU and may be the perfect place for your emergency fund. This account allows for a maximum of six automatic transactions per month. A good rule of thumb is to keep a cushion of six months of expenses, whether the funds are kept in a savings or money market account.

Step 2: Boost Your Earnings

Money market accounts and certificates are federally insured and offer unique features to meet different needs. As long as you meet account minimums, one of these may be the best option for you.

RCU money market accounts let you access your funds with a maximum of six cleared checks each month. Interest rates are higher than the savings account, with higher balances earning even higher rates. Also, these generally earn more if there’s an associated checking account.

Share certificates are less flexible, since you’re committing to a particular term. But the trade-off is you earn some of our highest deposit rates. In fact, recent rate hikes have made certificates a popular choice.

Step 3: Branch Out

Once the basics are in place, what’s next? There are plenty of options.

  • A “ladder” of certificates can take advantage of rising rates. If you have $5,000 to put aside, for example, you could set up five certificates of $1,000 each, with varying terms. As your short-term certificates mature, the long-term money continues to grow. And you can reinvest at current rates each time a certificate reaches maturity.
  • An individual retirement account (IRA) helps you prepare for the future, with possible tax advantages. (Consult your tax advisor.) RCU offers IRAs with deposit insurance and no fees, as well as IRA investment options.
  • There are also great options beyond the IRA with other types of mutual funds, annuities, stocks, bonds, and more. There’s a team of CFS* Advisors at RCU to help you manage your wealth and hit those big goals.
  • A health savings account could be a smart move if you have a high-deductible health plan. Funds carry over from year to year, and contributions are tax deductible.

Step 4: Stay in Touch

All of the deposit accounts here at RCU are easily accessible through online and mobile banking. You can watch your balances grow, track your deposits, and transfer money between accounts. It’s also easy to set up automatic transfers for reliable, hassle-free growth.


We’re here to help you compare options, set up a savings plan, and work toward your goals. Please don’t hesitate to call us at 1 (800) 479-7928 or stop by your nearest branch. Let’s build a bright financial future together!




*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The credit union has contracted with CFS to make non-deposit investment products and services available to credit union members.



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