Alaska Air Group Credit Union

Understanding Savings Rates

Apr 2022 | Financial Education, Savings

There are lots of different types of savings accounts that offer different dividend structures. But are you getting the best bang for your buck? Keep reading to find out!

Flat Rates –

This is the type of rate offered through Alaska Air Group Credit Union Savings Accounts*. This means that the rate does not change regardless of dollar amount or time. At AAGCU, our sub-savings have the same dividend payout as our regular savings so you can add as many savings accounts as you would like and achieve your savings goals!

Variable Rates –

A popular type of savings account has a high savings rate on a set amount (typically around $500), then the rate drops on any amount above that. Though the high dividend rate might look appealing at first glance, is it really a better deal?

The following chart depicts the difference between a savings account that offers a flat rate of .15% APY on the total balance, versus a savings account that offers a variable rate of 0.5% APY on the first $500 and .02% on any balance above $500.01.

Notice that below $2,000 in the account, the variable savings account offers a better dividend option. However, on anything above $2,000, the flat rate savings account offers a much better dividend payout. For most individuals, the savings account offering the .15% APY is the better savings account.

Tiered Rates –

Many financial institutions will also offer a high yield savings account or a money market account that offers tiered rates for higher dollar amounts. For example, it may look something like this:

$1 – 9,999.99 has an APY of .10%

$10,000 – 49,999.99 has an APY of .20%

$50,000 – 249,999.99 has an APY of .35%

$250,000+ has APY of .40%

This type of account can be helpful for people who want to earn dividends on large sums of money, but still want flexibility to access it. However, be mindful that many times the lowest tier in these accounts has a lower rate than a traditional savings. It would be worth it to do the math to ensure you are getting the most dividends.

The graph below depicts a tiered savings account using the tiers expressed above compared to a regular savings with a rate of .15% APY. Notice how until $20,000, the regular savings account offers higher dividends. However, instead of opting for a high yield savings or money market at this high dollar amount, you may want to look into certificates which typically offer higher dividends, though they do not offer as much flexibility as a savings account.

* Regular Savings, Sub-Savings Accounts, Youth Savings, and Christmas Club Savings. Your savings are federally Insured by NCUA.

Celebrate International Credit Union Day 2025!

On October 16, 2025, please join us in celebrating International Credit Union Day® at our SEA and ANC branches! International Credit Union Day® annually commemorates the credit union movement’s...

Fall Quarterly Flyer

It's Fall Y'all! Check out our quarterly newsletter to stay up to date on all of the exciting things going on at Alaska Air Group Credit Union. [button link="...

Budgeting and Expense Cutting

Budgeting is a term you might’ve heard when considering saving money. It allows you to meet your financial goals and prioritize your expenses. In hard financial times, saving money can be difficult...
Seattle Office
(206) 824-9800
Anchorage Office
(907) 563-5335