Did you know that your savings portfolio should be diversified just like your investments? Financial experts recommend giving your savings as much chance at 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Whereas a savings account has minimal restrictions on in-branch withdrawals, the funds in a share certificate can't be withdrawn without penalty until the maturity date.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 HEFCU, you can open up a certificate today. However, there are some basic requirements. Thse 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. At HEFCU, we offer our members certificates that can be opened for just six months, or as long as 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 nee 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 HEFCU certificate insured by the National Credit Union Administration up to $250,000, you can rest easy knowing your money is 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, contact us today. We're committed to giving your money its best chance at growth.