Money Minutes | General Electric Credit Union Blog | Financial Resources

Should I Open a Jumbo Certificate?

Feb 22, 2018 | 2 minute read

Should I Open a Jumbo Share Certificate? | What is a Jumbo Certificate?

Certificates are among the safest and most reliable ways to earn dividends on your savings. A low-risk option, you can choose from a variety of terms and earn a predetermined fixed rate during that time period.

A jumbo certificate requires a larger balance to open versus a traditional certificate. Generally, a minimum of $100,000, jumbo certificates offer a higher return on your funds during the set term. When the certificate matures, you can withdraw the money without penalty and collect the dividends earned or reinvest.

Features of Jumbo Certificates

If you have a large sum of money to invest, jumbo certificates have several distinct features. It’s important to understand what’s involved before investing.

Low-Risk Option:

For those with a low risk tolerance, a jumbo certificate brings peace of mind by guaranteeing your initial deposit is protected and earning consistently, no matter what happens in the market. When investing in a jumbo certificate at any financial institution, ensure your deposit is insured. General Electric Credit Union is federally insured by the NCUA up to $250,000 per member.

Higher Returns:

With a jumbo certificate, you can enjoy a higher return than traditional certificates. Typically, the longer the term of the certificate, the higher dividend rate you can receive on your money.

Minimum Balance:

Since jumbo certificates offer a higher return, they often require a larger balance to open. Before opening one, ensure you have enough capital to invest a large sum and not need it before the term ends as there are fees for withdrawing before maturity.

Opportunities for Collateral:

Should you need to borrow money at any time, some lenders will accept a jumbo certificate as collateral.

Should you open a jumbo certificate?

Jumbo certificates aren’t for everyone. Although interest rates can fluctuate on certificates, they are still a safe investment for those who want to save for their future.

Learn more about the different certificates we offer to find the best option to meet your investment goals.

 

 

 

 

 

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