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Maximize Savings With Certificates: Your Complete Guide

You have many options when it comes to home loan refinances. Discover what you need to know when it comes to leveraging the benefits of refinancing your home loan. 

Maximizing your savings is an important step in reaching your financial goals. However, not everyone is prepared to risk their savings with high-risk investments. Fortunately, with certificates, you can reach your savings goals with a guaranteed return. Certificates offer low-risk investing with a high yield. Certificates are one of the easiest ways to grow your money so you can reach your goals faster. Whether saving for a downpayment for your future home, a dream vacation, or a new life stage, certificates are a safe and easy way to maximize your savings. Utilize a savings certificate calculator to see what kind of interest you can earn with a certificate account. 

If you are looking for a way to grow your money faster with considerably less risk, read below to learn more about certificates. With this complete guide, you’ll learn how to use certificates to safely increase profits. Discover what certificates are, how they work, and how to find the right one for you. Let’s jump into the exciting world of certificates and watch your money grow. 

What Are Certificates? 

Certificates, also known as CD's at banks or Share Certificates at credit unions, are types of savings accounts with fixed interest rates that are typically higher than traditional savings accounts. A certificate account has a fixed-term rate as well as a maturity date, marking the end of the fixed term. You can select from various term lengths, depending on the financial institution and its available products. They typically range from three months to five years. 

When you open a certificate account, your money is locked in at a fixed rate for the duration of the fixed term. Choose the length of term that works best for you and watch your money grow faster. 

How Do Certificates Work? 

Different term lengths offer different interest rates. Typically, the longer the term the higher the interest rate, so you can select the term that works best for your saving goals and your daily financial needs. 

Certificate accounts can be a great way to save for a specific goal as they typically return higher interest than conventional savings accounts. Each month, dividends earned are deposited into the certificate account. Once your certificate matures, you will have the opportunity to change the term, add or reduce funds, or close the account and transfer your funds. You can also use multiple certificate accounts at once for added saving strategies. 

Certificates are not meant for daily expenses. In fact, you’ll want to avoid withdrawing money before the maturity date, as this can result in an early withdrawal penalty

To open a certificate account, you will need to apply through your financial institution of choice and be prepared to make the minimum deposit. Though minimum deposits vary according to the certificate terms, a standard share certificate can be opened for as little as $1 depending on the terms. If you are unsure how much to invest, use the free savings certificate calculator provided by Capital Credit Union to see how much interest you can earn depending on the deposit amount. Input the share certificate term length, APY rate, and various deposit amounts to see how much you can earn based on the size of your deposit. Choose an amount you can comfortably invest while still having enough for daily expenses and emergencies. 

Is My Money Safe? 

Accountholders want to invest securely with the knowledge that their money is safe. Certificates are insured up to the limit set by the National Credit Union Association (NCUA). Since certificates have federal deposit insurance, they are a safe way to save money. If your credit union fails and goes bankrupt, you are guaranteed to receive your money back up to $250,000. 

Certificates are safe, easy to manage, and low risk. You can utilize certificates for short- and long-term savings goals and save for the future, without risking your hard-earned funds. Overall, certificates are a safe place for savings intended for future use. They guarantee returns with minimal risk. 

How Do I Find the Best Certificate Account? 

Take the time to shop around for certificates with the best terms and rates. Look for the product that best fits your lifestyle and financial goals. Does your bank or credit union have a maturity date that works for you, and is the interest rate competitive? If not, it may be time to shop around for something more competitive. Finding certificates with the best rates may require joining a bank or credit union other than your primary financial institution. 

For extra savings, consider joining a credit union. Since credit unions are member-owned and are not-for-profit, they typically offer higher interest on their savings accounts with personalized customer service and added benefits for members. 

In addition to standard and jumbo certificates, Capital Credit Union offers a Member’s Choice Certificate where you can conveniently save as you go. Take advantage of a one-time penalty-free withdrawal and make additional deposits online or in person and save with more flexibility. Providing options that fit your lifestyle is important to us, so you can earn dividends over a 12-month term starting with as little as $1. Joining is easy. 

When Are Certificates Right for Me? 

How do you know if certificates are right for you? If you are saving for a specific goal, such as a downpayment for a house, car, upcoming wedding, or dream vacation, a certificate may be a worthwhile way to maximize your savings. Set aside a lump sum of money for future use, where it is out of sight so you are not tempted to spend it and it can build interest. 

If you need money immediately or are trying to build it slowly, opt for a traditional savings account. For combined flexibility and maximum savings, open a traditional savings account and a certificate account with Capital Credit Union and start saving today. 

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