MADISON, Wis. (10/23/13)--During the federal government shutdown, the value of a solid savings plan was underscored for more 400,000 furloughed federal workers.
According to a recent poll by the Consumer Federation of America, about half of all American families have heeded the warnings brought on by tough economic times and have a traditional savings account with a median balance of $2,400 (creditunionsonline Oct. 11).
Research shows that families are often faced with emergency situations, ranging from a car repair to a medical bill to a traffic violation, , CFA Executive Director Stephen Brobeck noted, adding a savings account is the best way--easiest and least expensive--for many families to pay for those unexpected expenses. He said, especially for those with few financial resources, relying on a credit card, payday loan, or even friends or families are usually much less desirable options.
Saving for between three to nine months-worth of expenses is about the average amount that will allow most families to increase financial security. And going to a credit union may be the best place to begin, Brobeck said.
Savings and financial literacy are among the principles credit unions stress to their members. Credit union financial educators reached 400,097 students in 12,243 classrooms presentations during the 2012 school year, according to the National Youth Involvement Board (News Now Aug. 22).
Also, credit unions' cooperative ownership structure allows them to offer generally higher savings rates than their for-profit competitors.
Research conducted and reported by GoBankingRates.com this year found that credit unions had the best savings account interest rates in the nation for 2012, according to a study of savings accounts at more than 4,000 banks and credit unions. Eight of the Top 10 U.S. Savings Account Rates were held by credit unions. Use the resource link to read about the study.