![]() ![]() Share Certificates are guaranteed by the National Credit Union Share Insurance Fund (NCUSIF), while CDs at banks are insured by the FDIC. This is nice if interest rates go down, but if they rise, your earnings won’t be worth as much.Īnother reason these products are popular as a long-term strategy is security. However, the dividend / interest earned is fixed when you open the account. Consumers like them because the rates tend to be higher than other savings accounts. You put money in, and the longer your term, the more dividends / interest you earn when you withdraw. At a credit union, you earn dividends on your money at a bank, you earn interest.ĬDs and Share Certificates are designed for the long term. Consider whether the increased earnings offset locking away the money for the required time, and decide which one is right for you.įor information about our Share Certificates, contact us.If you’re shopping around for financial products, you may have come across two similar things with different names: Certificates of Deposit (CDs) and Share Certificates.īoth offer long-term solutions to making the most of your money both have similar terms and both are considered to be safe bets for your cash.ĬDs and Share Certificates really only have one distinction between them: the latter is a product offered by credit unions like, Chartway. Of the many savings products credit unions provide, share certificates offer a higher-yielding but still safe way to invest money for a set period of time. Each account is federally insured up to $250,000, so you know your funds are safe and sound. Share certificates are federally insured by the National Credit Union Administration (NCUA), a US government agency. For higher deposit amounts, jumbo accounts are available and they generally earn a higher rate. You can open a share certificate with as little as $100, while a money market account often requires a larger deposit and doesn't earn as high a rate. Likewise, the shorter the term, the fewer dividends you earn. Keep in mind, the longer the term, the higher the rate. If you think rates will decline or remain the same, invest in a long-term share certificate. If you think rates will rise, invest in a shorter term. With terms as short as 6 months and up to 71 months, you have a wide range of investment options. As long as you don't withdraw the funds, you'll be able to calculate your dividends upon maturity at the onset of your investment. You pick the deposit amount, the term and the rate. There are no unknowns when you invest in a Share Certificate. For Chartway’s current share certificate rates, click here. Credit unions can choose to compound rates on a yearly, quarterly, monthly or even daily basis. ![]() This rate takes into account the compounding period, which is the frequency with which returns are added to the account. ![]() The dividends, or earnings, you can make on a share certificate are typically quoted in terms of the annual percentage yield, or APY. Here are a few more reasons why you may want to invest in a share certificate: While you cannot withdraw your funds during the pre-selected length of the term without penalty, you'll most likely earn a higher rate than any of the above-mentioned options. Share certificates are a beneficial option to earn dividends and grow your savings. If you're fortunate enough to have some extra savings and want to earn higher dividends (a sum of money paid regularly by a company to its shareholders out of its profits) than a regular savings or money market account, you may want to consider a share certificate.Ī share certificate account is similar to a certificate of deposit (CD), but is issued by a credit union (like Chartway), rather than a bank. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |