Few people want to risk their hard earned 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.
Fortunately, as a member of Patriot, you have access to an abundance of secure options for your savings, including savings accounts, money market accounts, holiday clubs and vacation club accounts.
Another excellent option we offer our members to help their savings grow is our share certificates. Sometimes known as savings certificates, and referred to by banks as CDs.
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.
However, at Patriot, we also offer more flexible options than the typical share certificate. Our Continuous Saver Certificate allows you to open with a small deposit and add to it throughout the term unlike a traditional share certificate.
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. In general, the more money you invest in a certificate, the higher rate of dividends it will earn. At Patriot, you can open a Continuous Savers Certificate with as little as $25 with additional deposits of $10 or more to be made as often as you like.
Certificate term lengths also vary 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. At Patriot, we offer our members certificates that can be opened for just 3 months or as long as 5 years. Our dividend rates start at 0.05% APY* for short-term certificates, and going up to 0.55% APY* for our long-term options.
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:
- Low risk. Your Deposits are insured by the National Credit Union Administration 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.
- 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. 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 your local branch today or click here to learn more. We’re committed to giving your money its best chance at growth.
* APY=Annual Percentage rate and rates are current as of 07/20/21 is subject to change without notice.