5 types of savings accounts and how they work

Updated March 22, 2024  |   Published December 13, 2022

Savings accounts are deposit accounts offered by banks and credit unions. Savings accounts typically have higher dividend rates than checking accounts. How much dividends you earn depends on the type of account you have. In order to determine which savings account best fits your needs, start by deciding on a savings goal. Are you saving for a big purchase like a vacation or Christmas shopping? Maybe you are saving for a child’s college fund or your future retirement? Or, perhaps you just want to set money aside in case of an emergency. Here are 5 different types of savings accounts offered at Webster First and how each of them work, so you can determine which is best for your needs.


Primary share account

The Primary Share account is your basic savings account. With a minimum balance of $5, it earns dividends on all balances greater than that with no maximum. With the primary share account, you get access your account at nearly 5,000 branches between Webster First and all our CO-OP partners. You get an ATM card to make withdrawals anytime, and you can sign up for online and mobile banking to view your account 24/7. Your money is not locked up in this type of savings account, so if any emergency were to come up, you have unlimited withdrawals. This account can be useful for those saving for a rainy day.


All purpose account

The All purpose savings account is great for saving towards a specific goal. Say you have a primary share account with all your emergency funds, but you’d like to separate money that you’re saving for a set goal. This account can help you manage those goals. Unlike the primary share savings, this account only requires a minimum balance of $1 (maximum of $10,000). It earns dividends on all balances over $10. Once you have enough for your vacation, your Christmas shopping, or your wedding, you can withdraw it all but $1. You get the same access to nearly 5,000 ATMs in our network, online and mobile banking, and zero monthly fees. Check our rates to stay up to date on what you could be earning.


Money market

Money Market accounts are a type of savings account that require higher minimum balances than your basic savings account, and in turn will earn more interest. This type of savings account is ideal for someone interested in growing their money while maintaining flexibility. Money Market accounts do not lock up your money. You can make unlimited withdrawals in person at your local branch, but your ATM or phone withdrawals are limited to 6 per month, as the purpose of this account is to keep your savings growing! Banks and credit unions will often offer different tiers of Money Market accounts. At Webster First, in addition to our regular Money Market, we have a Money Market Plus which earns a higher APY* on higher balances.** Again, check our rates to see what you could be earning on your money.


Share Certificate

Share Certificate accounts are accounts offered by credit unions that earn an even higher yield than Money Markets. They are similar products to Certificates of Deposit or “CD”s offered by banks – with the distinctive difference that they yield dividends rather than interest. But what you gain in dividends, you lose in flexibility. Share certificates lock up your money for a specific term of your choosing. You are able to withdraw if it becomes absolutely necessary, but you will need to pay a penalty if it is before your selected term ends. Once your term is over, you can take the money and the dividends you’ve earned from the share certificate or you can roll it over into a new term. For a limited time, Webster First is offering special rates on our share certificates in 9 and 15 month terms.



An IRA or Individual Retirement Account is a savings account meant specifically for retirement savings. Similar to certificates, our IRAs come in a variety of terms at different interest rates. We offer 3 different types of IRAs: a Traditional IRA, a ROTH IRA, and a Spousal IRA. A Traditional IRA at Webster First allows you to defer taxes on earnings until they are withdrawn. Some contributions are also tax deductible in the tax year in which you make them. A ROTH IRA allows only non-deductible (after-tax) contributions and features tax-free withdrawals for certain distribution reasons after a five-year holding period. Our Spousal IRAs offer better services for members who are married. Couples are only eligible if they file a joint federal tax return. Check our IRA page to learn more, see if you are eligible, and check our most current rates.



*APY = Annual Percentage Yield. Compounds daily. APY is accurate as of October 28, 2022. Penalty may be imposed for early withdrawal. Fees may reduce earnings. Minimum balance to obtain these rates is $1,000 and cannot be transferred from an existing Webster First Federal Credit Union account. Term of the advertised rate is 27 months. Rates subject to change. Limited time offer. Insured by NCUA. Member MSIC.

**If Money Market Plus criteria isn’t met in any given month, regular Money Market rates will apply for that month. Money Market Plus criteria is: must have active checking account with minimum of 1 direct deposit into the checking account and 10 debit card transactions from the checking account per statement cycle to qualify for higher rates, otherwise standard money market rates apply.