Saving in a low-yield world
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Top savings rates for members only

Chances are that with today's low interest rates, the difference between a members-only CD and another bank's savings account is minor, Seaman says. So, you may need to invest a substantial amount of money to receive a pure net financial benefit (after paying the membership fee).

For example, if you have to pay $50 in membership dues per year, you'd need to invest about $100,000 to benefit from a CD's 5 basis point interest rate advantage over another CD if the interest is compounded daily, Seaman says.

Of course, it's important to also weigh the other benefits of a club membership when making your decision. For example, AAA members receive perks such as emergency assistance, free travel plans and maps, discounts at different retailers, Gerhard says.

“Ideally, you'd like to have a product that offers daily compounding.”

If the members-only organization's savings account is the best deal, or you're already a member, signing up for the product may make sense. In making your decision, also look at other factors to determine the product's value to you, Seaman says.

"Consider the level of convenience you require," she says. "Do you prefer to bank online or go to a branch? Look at the minimum and maximum deposit requirements. Do you have the amounts necessary to save?"

Fees and penalties

The withdrawal penalty is another detail to consider. Which fees will you have to pay if you lose your job and need to quickly access to the savings? Are you comfortable with that possibility?

Seaman notes that even these questions can be answered with a simple math equation.

"Let's say a CD has (a) withdrawal penalty of six months," she says. "Your CD calculator may reveal that the forfeited penalty amount is only $20. By attaching a dollar amount to the equation, it becomes much easier to visualize if the product is a good fit."

Additionally, review how the organization handles the CD when it matures. Will the funds roll over automatically into a new term? Or will it require you to take a proactive step to access those funds? Most importantly, which approach do you prefer?

"There's no right or wrong answer," she says. "Just make sure you ask yourself that question and can act on your preferred choice."

Remember, your investigation may reveal that the club's banking options are not right for you, says Bill Griffith, a Certified Financial Planner in Washington, Pa.

"A savings account is just one place where you can put cash," he says.

The best use of your money may be to pay off outstanding loans or find more aggressive investments, Griffith says. This is especially true if you carry credit card balances, he adds.

"Anything over what's needed for reserves can be used to reduce higher interest debt," he says. "It's an especially good idea when yields are low on savings accounts."

If you're not saving for retirement, your money may also be better spent investing in a longer-term investment strategy, such as a 401(k) or IRA, instead of a members-only CD, Griffith says.

Final steps

If you do decide that the members-only financing deal is your best choice, review your organization's rules before making any money moves.

There could be a provision that precludes you from getting special rates. For example, only about 40 out of 50 AAA auto clubs participate in its high-yield savings account program, according to Gerhard.

If the members-only association isn't a bank, it's important to research who will handle the financial account.

Members-only organizations generally partner with banks, so their savings accounts are FDIC-insured. AAA's savings vehicles are offered in partnership with Discover Bank. Costco partners with Capital One Direct Banking.

"It's important to make sure your investments are safe," says Solis.

Investors should also pay attention to market conditions and how they could affect your portfolio.

"The next 'gotcha' could be a sharp increase in inflation," Solis says.

If that happens, you could experience a decrease in the purchasing power of your investment, and you may have to revisit your savings strategy, he says.

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