What is a Term Share Certificate and is it right for you?
No one wants to play around with their savings. Whether you’ve just received a lump sum through a work bonus, inheritance or other unexpected windfall, or you’ve been saving for a while until you’ve built a sizeable nest egg, you likely want to park your savings in a place that offers your money its biggest chance at growth without risking a loss.
Lucky for you, as a member of Cooperative Teachers Credit Union, you have access to an abundance of secure options for your savings, including a Regular Savings Account, Investors Club Account, IRAs, and our Christmas Club Account.
Another excellent option we offer our members to help their savings grow are Term Share Certificates. Sometimes known as savings certificates, and referred to by banks as CDs, these unique accounts blend higher growth potential of a stock investment with the security of a typical savings account.
Let’s take a closer look at this savings product and why it might be the perfect choice for you.
What is a share certificate?
A share certificate is a federally insured savings account with a fixed dividend rate and a fixed date of maturity. The dividend rates of these accounts tend to be higher than those on savings accounts and there is generally no monthly fee to keep the certificate open.
Aside from the higher dividend rate, share certificates differ from savings accounts in the more limited accessibility of the funds within the account. A typical certificate will not allow you to add any money to the certificate after you’ve made your initial deposit. You also won’t be able to withdraw your funds before the maturity date without paying a penalty.
Terms and conditions of certificates
You’ll need to meet some basic requirements before you can open a certificate including a minimum opening balance and a commitment to keep your money in the account for a set amount of time.
The minimum amount of funds you’ll need to deposit to open a certificate will vary in each financial institution. It also depends upon the term you choose. Some institutions will accept an initial deposit as low as $50 for a certificate. Others, such as a “jumbo” certificate, will require an opening balance of $100,000 or more. You can visit our Term Share Certificate page to view our current terms and rates.
Is a share certificate for everyone?
While keeping your savings in a certificate can be an excellent option for your money, it is not for everyone. Before you move forward with opening a certificate, be sure you won’t need to access the funds before the certificate’s maturity date. It’s best to have a separate emergency fund set aside to help you through an unexpected expense.
Why keep your money in a certificate?
Here are some of the reasons people choose to open a certificate:
With each Cooperative Teachers Credit Union certificate insured by the National Credit Union Administration (NCUA) up to $250,000, you can rest easy, knowing your money is completely secure.
Higher dividend rates
Certificates offer all the security of savings accounts with higher yields.
There’s no stressing over fluctuating national interest rates with a certificate. The APY is set when you open the account and is locked in until its maturity date. This means you can calculate exactly how much interest your money will earn over the life of the certificate the day you open it.
If a certificate sounds like the perfect choice for you, stop by Cooperative Teachers Credit Union today to learn more. We’re committed to giving your money its best chance at growth.
* APY=Annual Percentage Yield.