Life is full of surprises, and not all of them are pleasant. An emergency fund is your financial safety net, helping you handle unexpected expenses like medical bills, car repairs, or sudden job loss. While building an emergency fund might seem daunting, using a reverse-tier savings account, like our Power Savings Account, can make the process simpler and more rewarding. Here’s how you can use this innovative savings tool to achieve your financial goals.

What is a Reverse-Tier Savings Account?

A reverse-tier savings account offers a unique approach to earning interest. Unlike traditional savings accounts, which reward higher balances with better interest rates, a reverse-tier account provides the highest rates for lower balances. This structure incentivizes consistent deposits, encouraging savers to quickly grow their funds while earning more interest during the early stages of saving. Then typically, once your account reaches a certain balance amount, the interest you earn will start decreasing.

For example, our Power Savings Account offers 5.50% APY on the first $1,000 and 1.50% APY on balances between $1,001 - $2,500.* Many reverse-tier savings accounts also have a low or no minimum balance requirement, making it easy for anyone to start saving. Our Power Savings account has no minimum balance requirement.

Why Use a Reverse-Tier Savings Account for Your Emergency Fund?

Higher Interest Rates for Small Balances: If you’re just starting to create your emergency fund, a reverse-tier savings account ensures even modest contributions work harder for you.

Encourages Discipline: Knowing your smaller balance is earning more interest can motivate you to reach your savings goal faster.

Flexible Access: Emergency funds need to be accessible when you need them. Reverse-tier accounts often come with easy withdrawal options without locking your money away.

Step-by-Step Guide to Building Your Emergency Fund

Set a Goal
Determine how much you need for your emergency fund. A general rule of thumb is to save three to six months’ worth of living expenses. If that feels overwhelming, start smaller, aiming for $1,000 as an initial goal.

Open a Reverse-Tier Savings Account
Credit unions are known for providing excellent options for beginning savers. Open a Power Savings Account with Partner Colorado. With no minimum balance required, any amount is worth saving.

Our round-up feature lets you automatically save while you’re making everyday purchases. When you use your Partner Colorado debit card that’s attached to your checking account, your total purchase is rounded up to the nearest dollar and the spare change is place automatically into your Power Savings Account. For example, a debit charge of $10.84 is rounded up to $11.00 and the difference of $0.16 is deposited to your savings.

Automate Your Savings
Consistency is key to building an emergency fund. You can also set up automatic transfers from your checking account to your reverse-tier savings account. Even $25 or $50 per paycheck can add up quickly.

Prioritize Saving
Treat your emergency fund contributions like a monthly bill. By prioritizing saving, you’ll reach your goal faster. Avoid the temptation to dip into this account for non-emergencies.

Tips for Success
Celebrating milestones can help you reach your savings goals, like $500 or $1,000, is worth celebrating. Small wins keep you motivated. Also try to avoid withdrawals and only tap into your emergency fund for genuine emergencies. For planned expenses, use a different account. You should also review your budget to look for areas to cut back temporarily to boost your emergency fund contributions.

Building an emergency fund with a reverse-tier savings account is a smart and efficient strategy. By taking advantage of higher interest rates for lower balances, automating your savings, and staying disciplined, you can create a safety net to weather life’s unexpected challenges. Start today, and enjoy the peace of mind that comes with financial preparedness.


*APY = Annual Percentage Yield. Limit one Power Savings Account per member. The interest rate is applied to the average daily balance and is paid at tier rates on the balances within each tier. Dividends are compounded and credited monthly based on the average daily balance present in the Power Savings Account. Member eligibility is required. The APY for the Power Savings Account is current as of 09/16/24. Rates and terms are subject to change at any time without notice. Fees may reduce earnings on the account.