The money market is a subsection of the fixed income market. We generally think of the term fixed income as being synonymous to bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that matures in less than one year).
Money Markets and Investment Certificates
- Minimum deposit required is $1,000.
- Dividend rate fixed for term selected.
- Dividends calculated by the daily balance method.
- Dividends are compound daily and paid monthly.
- Dividends may be credited to the certificate, mailed to member, or credited to a member suffix each month.
- Credited dividends may be withdrawn at any time without penalty.
- Funds may be withdrawn ten days after maturity date without penalty.
- Funds on deposit may be used as collateral for loans at SAFE only at a rate of 3% above the APR of the certificate used as collateral.
- Insured up to $250,000 by NCUA.
- Relatively low cost to start.
- Security of guaranteed earnings for the period.
- Earns money from day of deposit.
- Earns more money by frequent compounding.
- Flexibility of using dividends or leaving them in the certificate to earn more interest.
- Convenient access and peace of mind that funds are available if needed without cost.
- Flexibility of withdrawals and no worry about coming in on the exact maturity date.
- Flexibility of using funds at low cost without depleting the balance.
- Avoids penalty cost of making a withdrawal.
- No worry and no risk of loss.
Money Market Certificates
- Maturity options available for three or six months.
- Term may be extended to the next term.
- Interim maturity months are not renewable.
- Amounts above the $1,000 minimum may be withdrawn in increments of $500 with penalty of 30 days interest charged only on the withdrawn amount.
- Convenience of selecting term to match anticipated need for the funds.
- Flexibility of partial withdrawals and low cost when necessary.