Money & Savings

1 — Compare what the savings can earn

Use Annual Percentage Yield (APY) to compare accounts, but check whether the rate is temporary, requires a minimum balance, or comes with fees or access restrictions.

APR and APY — what is the difference?

APR means Annual Percentage Rate. For borrowing, it expresses the yearly cost of credit. Depending on the type of loan, it can include interest and certain fees. It does not necessarily include every charge.

APY means Annual Percentage Yield. For savings, it expresses yearly interest earnings with compounding included. Compounding means interest left in the account can earn more interest.

If a savings account also lists APR: that describes its annual interest rate before the effect of compounding. APY includes that effect, making it more useful for comparing savings earnings.

Example: $1,000 at 4% APY earns $40 over one year if the rate stays the same, the money and interest remain deposited, and there are no fees or other transactions.

When comparing: use APY for savings earnings and APR for borrowing costs. Check fees, repayment terms and access conditions separately. Savings fees can reduce what you keep even when the advertised APY looks attractive.

2 — Compare the account conditions

Regular or high-yield savings: compare APY, fees, minimums and access.

Money-market deposit account: compare APY and account conditions while checking how you can access the money.

Certificate of Deposit (CD): compare APY and term, then check the maturity date and early-withdrawal penalty before locking money away.

3 — Check protection and purpose

Confirm whether the institution and deposit account are eligible for Federal Deposit Insurance Corporation (FDIC) insurance at a bank or National Credit Union Administration (NCUA) share insurance at a federally insured credit union, subject to applicable ownership and coverage limits. Keep emergency savings accessible enough for its purpose rather than choosing a rate alone.

Worth knowing: interest can earn interest. Interest added to your savings can begin earning interest too. Over longer periods, the combination of time, regular deposits and compounding can matter as much as finding a slightly higher rate.

Labor union, credit union & cooperative — what is the difference?

Labor or trade union: an organization that represents workers in employment matters. A union may bargain with an employer over wages, hours, benefits and other terms and conditions of employment. It is about workers and the workplace—not providing banking services.

Credit union: a member-owned, not-for-profit cooperative financial institution. Members use it for financial services such as savings, checking and loans and have ownership and voting rights under the credit union's structure.

Cooperative (co-op): a broader member-owned business model. A cooperative can provide many kinds of goods or services. A credit union is one specific kind of financial cooperative, but not every cooperative is a credit union.

Easy distinction:
Labor union → represents workers.
Credit union → provides member-owned financial services.
Co-op → a broader member-owned organization or business.

NLRB: collective bargaining and labor unions ›
NCUA: what is a credit union? ›

Continue forward

Use your own numbers next, then compare them with current savings-rate information.