MCU's Savings Account Options and Interest Rates
MCU (Municipal Credit Union) does not currently offer a dedicated high yield savings account. MCU is a credit union based in New York that serves members in the New York City area and some surrounding regions. Their savings products include regular savings accounts and money market accounts, but these do not compete with the rates you'll find at online banks or credit unions that specialize in high yield savings.
MCU's regular savings accounts earn interest, but the rate is substantially lower than what online banks offer. As of the most recent data, MCU's savings rates fall in the range of 0.01% to 0.05% APY depending on the account type and balance tier—far below the 4% to 5% APY that online banks and some credit unions currently offer on high yield savings accounts.
If you are an MCU member looking for better returns on your savings, you have options. You can keep your checking account at MCU for convenience while opening a high yield savings account elsewhere, or you can explore whether MCU's money market account offers a rate closer to what you need. Many people maintain accounts at multiple institutions for this reason.
Key Takeaways
- MCU offers savings and money market accounts but not a high yield savings product, and their rates are typically below 0.10% APY.
- Online banks and some credit unions currently offer high yield savings rates between 4% and 5% APY, which is significantly higher than MCU's offerings.
- You do not have to close your MCU account to open a high yield savings account elsewhere; many people use both simultaneously.
- MCU's money market account may offer a slightly higher rate than their basic savings account, so comparing the two within MCU is worth doing before looking outside.
Why MCU's Rates Are Lower Than Online Banks
Credit unions like MCU operate differently from online banks. MCU has physical branches, staff, and overhead costs in the New York area. Those costs are built into their pricing model, which means they cannot offer the same rates as banks that operate only online and have minimal physical infrastructure.
Online banks have lower operating costs and pass those savings to customers through higher interest rates on savings accounts. They also compete aggressively on rate to attract deposits, since deposits are their primary source of funding. MCU, by contrast, serves a specific geographic membership and does not need to compete nationally on savings rates.
This does not mean MCU is a bad choice for checking or other services. Many members value the ability to walk into a branch, speak to a person, and handle transactions in person. The trade-off is that you pay for that convenience through lower interest rates on savings.
MCU's Money Market Account as an Alternative
MCU does offer a money market account, which typically pays a higher rate than their basic savings account. Money market accounts usually require a higher minimum balance to open and may limit the number of withdrawals per month, but they can be a middle ground if you want to stay within MCU.
Before opening a high yield savings account elsewhere, check MCU's current money market rate and terms. If the rate is close to what you need and you prefer to keep all your accounts in one place, it may be worth using. However, if MCU's money market rate is still significantly below 1% APY, you will earn substantially more by moving funds to a high yield account at an online bank.
How to Compare MCU Against High Yield Options
When comparing MCU's rates to other banks, look at the APY (annual percentage yield), not just the interest rate. APY includes compounding and shows you the true return over a year. Also check whether the rate is promotional or permanent—some banks offer high introductory rates that drop after a few months.
Create a simple spreadsheet with the following columns: bank name, current APY, minimum balance required, monthly withdrawal limits, and whether the rate is may provide or promotional. Include MCU's savings and money market accounts alongside three to five online banks or credit unions that offer high yield savings. Multiply your savings balance by each APY to see the dollar difference over one year.
For example, if you have $10,000 in savings, the difference between 0.05% APY (MCU) and 4.5% APY (a high yield account) is roughly $450 per year. That money adds up quickly, especially if you plan to keep the account open for multiple years.
Opening a High Yield Account While Keeping MCU
You do not need to close your MCU account to open a high yield savings account elsewhere. Many people maintain a checking account at their local credit union for everyday banking and bill payments, then keep a high yield savings account at an online bank for money they want to grow.
The process is straightforward: choose an online bank or credit union that offers high yield savings, visit their website, and open an account online. You will need your Social Security number, a government ID, and proof of address. Funding the account typically happens via ACH transfer from your MCU checking account, which takes one to three business days.
Once the account is open, you can transfer money from MCU to your high yield account whenever you want. Some people set up automatic transfers each payday to build savings without thinking about it. Others transfer a lump sum once and leave it to grow.
What to Watch When Switching Banks
If you do decide to move savings out of MCU, keep your MCU checking account open if you use it for regular expenses. Closing accounts can affect your credit score slightly, and you may want to keep the relationship active in case you need a loan or other service from MCU later.
Also be aware that high yield savings rates change frequently. The 4% to 5% rates available now may drop if the Federal Reserve lowers interest rates. When that happens, rates across all banks will fall together. The advantage of a high yield account is that it will still be higher than MCU's rate, but do not expect the current gap to last forever.
Finally, make sure any bank you choose is FDIC insured (for banks) or NCUA insured (for credit unions). This protects your deposits up to $250,000 per account. MCU is NCUA insured, and most online banks are FDIC insured. Check the bank's website or call to confirm before you transfer money.
Frequently Asked Questions
Can I keep my MCU checking account and open a high yield savings account somewhere else?
Yes. Many people do this. You can use MCU for checking and bill payments while keeping a high yield savings account at an online bank for money you want to save. There is no rule against having accounts at multiple institutions, and it often makes financial sense to do so.
How much more money will I earn with a high yield account instead of MCU?
It depends on your balance and how long you keep the money there. If you have $5,000 in savings, the difference between MCU's 0.05% APY and a 4.5% high yield account is roughly $225 per year. With $20,000, the difference is about $900 per year. Over five years, those differences compound.
Will MCU ever offer a high yield savings account?
MCU has not announced plans to launch a high yield product. As a regional credit union with physical branches, their business model does not currently support the rates that online-only institutions offer. If you need high yield savings now, you will need to look outside MCU.
Is it safe to move my savings to an online bank I have never heard of?
Yes, as long as the bank is FDIC insured or the credit union is NCUA insured. Check the bank's website for the FDIC or NCUA logo, or call the FDIC at 1-877-275-3342 to verify. Insurance protects your deposits up to $250,000 per account, regardless of the bank's size or reputation.
What happens to my money if I transfer it from MCU to another bank?
The transfer happens via ACH, which is a secure electronic system. Your money moves from your MCU account to the new bank's account in one to three business days. Once it arrives, it is held at the new bank and earns interest at their rate. Your MCU account balance decreases by the amount you transferred.