We save for numerous reasons – an upcoming vacation, college tuition, retirement, and other expenses, both expected and unexpected. Saving provides peace of mind, so we aren’t financially stressed when it comes time to write a big check. While there are various savings options to choose from, there’s one guaranteed and safe option - a certificate.
How is a Certificate Different from a Savings Account?
In a standard savings account, you’ll have more access to funds, but you won’t accrue nearly as much interest. Certificates are commonly used for short- and long-term savings goals due to their exponentially higher rates and variety of terms. In exchange for the higher rate, your money is locked in for a set term; you can choose a time frame that best aligns with your savings goals and budget.
Why Certificates Are a Great Savings Investment
Certificates are one of the safest and most reliable options to help you reach your financial goals, here’s why:
- Higher dividend rates. You’ll earn a higher rate of return than a regular savings account.
- Fixed and predictable rate of return. You have complete control. You choose the deposit amount and term. Assuming you don’t withdraw your funds early, your earnings are guaranteed. You know exactly what will be earned from the start, making certificates a very safe and predictable option.
- Protected savings with no risk. If overspending is a concern, the great thing about certificates is the money is safely out of reach for a fixed period of time. This safeguards you from the temptation of spending your savings. Plus, certificates are protected by the National Credit Union Administration (NCUA) up to $250,000.
Opening a certificate can be a worthwhile savings option if you’re looking to earn more on your money and it can be the perfect boost you need to start saving for life’s biggest milestones.
Still have some unanswered questions about certificates? Check out our “What is a Share Certificate?” article.
If you’re interested, we do offer several types of certificates, in a variety of terms and rates to fit any savings strategy.