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Why credit union share certificates are a great savings tool

Blog Post
2 min read
woman pulling money from her wallet smiling

Deciding where to invest your hard-earned money can seem like a complex undertaking with lots of options. One simple choice that often gets overlooked is investing in a share certificate—particularly those offered at a Credit Union. Here’s why you should consider adding them to your portfolio.

First, let's start with the basics. What is a share certificate? Commonly called a certificate of deposit at banks (at credit unions, we use a different name and often offer much better rates), it's actually a type of savings account that usually yields a higher interest rate than a regular savings account--typically because you're agreeing to "lock in" your deposit for a set period of time, called a term. At the end of the term, you receive your initial deposit plus the interest you earned.

Now, let's talk about why credit union share certificates are a great way to save.

Higher interest rates: Credit unions often offer higher interest rates on their share certificates compared to traditional banks. This means you can earn more on your savings without taking on more risk.

Low risk: Share certificates are a low-risk investment because they are federally insured up to $250,000 per depositor. This means that if the credit union were to fail, your savings are protected. That's unlike stock market investments where your principle may be at risk. 

Flexible terms: Credit unions often offer a variety of share certificate terms, ranging from 3 months to 5 years or more. This allows you to choose a term that works best for your goals and timeline.

No fees: Unlike some investment options, there are typically no fees associated with opening or maintaining a share certificate at a credit union. This means that more of your money goes towards earning interest.

Credit unions are member-owned: Credit unions are not-for-profit institutions, which means they’re owned by their members. This can lead to better rates and lower fees since credit unions are not focused on making a profit for shareholders.

In addition to these benefits, adding a credit union share certificate to your portfolio allows you to balance out some of your higher-risk investments with a low-risk, steady-return option. If you’re interested in learning more about share certificates, your SAFE family is a trusted source. We’ve got some of the best rates around and would love to help you get started.