When you deposit money into a savings account (or a share account) with Volt Credit Union, we give you interest back on your deposits. How does your savings account generate interest? Volt explains in today’s blog.
Related Post: What Is a Share Certificate? Volt Credit Union Explains
What We Do With Deposits
Volt is a not-for-profit credit union dedicated to our members. We’re different from traditional banks because we don’t answer to stock investors or Wall Street shareholders. Therefore, we may be able to offer higher interest rates on savings accounts versus a traditional bank.
Like other financial institutions, we use deposits given to us as investments for our members. The money you deposit might go towards someone’s car loan or mortgage. Because we use your money to fund loans for other members, we give you interest in return as a reward for letting us borrow your money. In essence, your savings account is a loan you give to Volt Credit Union!
What Interest Rates Can You Get?
Interest rates on savings accounts vary at Volt Credit Union. Primary savings accounts offer the lowest annual interest rates because they have the smallest minimum standards to maintain. Share certificates offer higher interest rates because they require higher amounts to maintain, and you can’t access the money for a certain period of time. You can see our current interest rates on our savings account page by choosing the button that says See Our Rates.
When Do You Receive Interest?
Volt Credit Union deposits interest into your savings account monthly. We use the daily balance method to calculate dividends, which means we apply a daily periodic interest rate to the savings account each day. At the end of each month, you receive a dividend payment in your account.
Each dividend payment increases the daily balance, which means you can earn even more dividends due to a higher amount in your account applied to the same interest rate.
Paying Taxes on the Interest
Dividends are considered income for income tax purposes. You’ll receive a 1099-INT form from Volt Credit Union at the beginning part of each year before you file your taxes. The form outlines how much money you earned in the previous year from interest on your savings account.
Related Post: What’s the Difference Between a Credit Union and a Bank?
Questions? Volt Credit Union Has Answers!
Do you have questions about your savings account with us? Contact Volt Credit Union today, and we’ll happily answer your questions.