Did you know that your savings portfolio should be diversified just like your investments? Financial experts recommend giving your savings as much chance as growth as possible. Let’s take a look at an especially great choice for diversifying your savings: a share certificate.
What is a share savings certificate?
A share certificate is an insured savings account with a fixed dividend rate and a fixed date of maturity as well. The funds in these accounts will grow at a dividend rate that is usually higher than those on typical share savings accounts, and some money market accounts.
How is a share certificate different from a savings account?
There are several differences between a share certificate and a savings account, but the main one is the accessibility. Whereas a savings account has minimal restrictions on in-branch withdrawals, the funds in a share certificate can’t be withdrawn without penalty until the maturity date.
Terms and conditions of certificates
As a member of New Orleans Firemen’s Federal Credit Union, you can open up a certificate today. However, there are some basic requirements. These include having a minimum opening balance and committing to keeping your money in the account for a set amount of time.
Certificate term lengths also vary among financial institutions, with most offering a choice of certificate terms ranging from three months to five years.
Is a savings certificate for everyone?
While keeping your savings in a certificate can be an excellent way to diversify your savings, it’s not for everyone. Only go ahead with your decision to open a share certificate if you are fairly certain you will not need to access these funds before the maturity date.
What are the advantages of diversifying your savings through a share certificate?
Here are some of the most popular reasons people choose to open a certificate:
Low risk. With each certificate insured by the National Credit Union Administration up to $250,000 you can rest easy, knowing your money’s safe.
Higher dividend rates. Certificates offer all the security of savings accounts, but with higher yields.
Locked-in rates. The APY of your certificate is set when you open it and is locked in until its maturity date.
If a certificate sounds like the perfect choice for you, stop by today to learn more. We’re committed to giving your money its best chance at growth.
