How a Share Certificate Helps You Save

Any time is a good time to work on building your savings, but using your tax refund is a great way to get a jump start. There are many types of accounts to help you save – traditional savings accounts, money markets, share certificates or CDs, IRAs or other types of investment accounts. In this blog, we’re exploring share certificates as a safe and secure way to create a healthy savings habit.

You may have heard the term CD (certificate of deposit) which is a type of savings account available at banks. Share certificates are very similar except they are issued by a credit union like us. A share certificate offers higher yields than a traditional savings account. In exchange, you leave your money in the account for a specified amount of time. The longer you choose to leave your money the better the rate tends to be. If you withdraw your money too early, you can be charged a penalty. At Credit Human, we offer share certificate terms ranging from 6 months to 10 years.

So why should you consider putting some or all your tax refund into a share certificate? With as little as $500 you can safely invest your money with a competitive, secure interest rate that increases your savings just by letting it sit there. You choose a term length that works for your goals – whether it be to for a vacation, wedding, buying a car or home – so you can access the funds when you need it.

For example, if you put $500 in a share certificate for 1 year at a 0.85% interest rate the next year you will have earned $4.25. The longer the term, the more you earn. For example, if you put $1,000 in a share certificate for 5 years at a 1.39% interest rate then you will have earned $71.97 by the end of the term. These numbers may not seem like a lot, but unlike many other options the money you investment is never at risk. And you’ll have created a savings habit that keeps money in your savings where you’re not tempted to spend it. If you don’t need it at the end of the term you can easily roll it over for another term and even add some more money to keep it growing until you need it. It’s a great way to grow your savings without having to spend a lot of time managing it.

We’re here to help you choose the best savings account for you to reach your goals. Stop by one of our Financial Health Centers to talk to a specialist about your savings goals and we’ll discuss the best way to help you reach them.