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All You Need To Know About Savings Certificates

Make your money work harder for you with a share certificate! It’s a safe, secure way to make your money earn a great rate of return in exchange for leaving it on deposit. Learn more!

If the lump under your mattress is getting uncomfortably big and you’re looking for a safer, more lucrative place to park your savings, look no further than Coulee Dam Federal Credit Union. As an institution that’s completely devoted to your financial wellness, we offer several secure options for savings, including Savings Accounts, Available Asset Account, Christmas Club, and Vacation Clubs.

Another excellent option we offer our members to help their savings grow is our Share Certificates and Installment Certificates. They are sometimes  referred to by banks as CDs. These unique accounts offer the best of both worlds when it comes to your savings. First, you’ll be giving your money a greater chance at growth than it would have in a typical savings account. Secondly, you are not subjecting your savings to the inherent risks and potential for loss that accompanies investing in the stock market.

Let’s take a closer look at the way this fantastic savings product works and why it might be the perfect choice for you.

What is a

Certificate?

A savings 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 some money market accounts. Generally, there is no monthly fee to keep the certificate open.

However, unlike a savings account, your money will be tied up in a certificate. A Share Certificate will not allow you to add any money to the certificate after you’ve made your initial deposit but a Installment Certificate will allow a set monthly installment amount.  You also won’t be able to withdraw your funds before the maturity date without paying a penalty.

Terms and conditions of Certificates

As a member of Coulee Dam Federal Credit Union, you can open up a certificate today. However, there are some basic requirements that must be met before you can do so, 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 widely from one financial institution to the next and 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 demand an opening balance of $100,000. In general, the more money you invest in a certificate, the higher rate of interest it will earn. At Coulee Dam Federal Credit Union, you can open a Installment Certificate with as little as $100 or a Share Certificate with as little as $500.

Certificate term lengths also vary greatly among financial institutions, with most offering a choice of certificates that run from three months to five years. Typically, certificates with longer maturity terms will earn a higher rate. Here at Coulee Dam Federal Credit Union, we offer our members certificates that can be opened for just 6 months or as long as 5 years.  To hear more about our certificate terms and rates, speak to a CDFCU Member Service Representative today or click here!

Is a savings 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 go this route, ask yourself these important questions:

  • Do I have an emergency fund set aside to help me get through unexpected events or circumstances?
  • Do I anticipate needing to access these funds during the life of the certificate?

Remember: Your money will be tied up in the certificate and you will not be able to access it without paying a penalty. A certificate works best for people who have money set aside for a rainy day and are fairly certain they will not need to access the funds in the certificate until its maturity date.

Why keep your money in a certificate?

Here are some of the most popular reasons people choose to open a certificate:

  1. Low risk. While nearly every investment carries some sort of risk, your money is always safe in a certificate. With each Coulee Dam Federal Credit Union certificate federally insured by the National Credit Union Administration up to $250,000, you can rest easy, knowing your money is completely secure.
  2. Higher dividend rates. Certificates offer all the security of savings accounts with higher yields. It’s more for your money, just for choosing to invest it in a certificate.
  3. Locked-in rates. 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. Instead of playing guessing games, you can determine exactly how much interest your money will earn over the life of the certificate the day you open it. Click here to use our Certificate of Deposit Calculator to help you determine how much interest your money could earn!

 

If a certificate sounds like the perfect choice for you, stop by CDFCU to open your certificate today or click here to learn more about our Share Certificates or Installment Certificates! We’re committed to giving your money its best chance at growth.

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