Did you know that your savings portfolio should be diversified just like your investments? Financial experts recommend giving your savings as much chance as 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Whereas a savings account has minimal restrictions on in-branch withdrawals, the funds in a share certificate can’t be withdrawn without penalty until the maturity date.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 Directions Credit Union, you can open up a certificate today. However, there are some basic requirements. These include having a minimum opening balance and committing to keeping your money in the account for a set amount of time. At Directions Credit Union, you can open a certificate with as little as $500.

Certificate term lengths also vary among financial institutions. At Directions Credit Union, we offer our members certificates that can be opened for just 3 months, or as long as 5 years. To view our current certificate rates, please visit our website.

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 need 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:

1. Low risk. Directions Credit Union certificates are insured by the National Credit Union Administration, a U.S. Government agency, up to $250,000 with an additional $250,000 of coverage provided by Excess Share Insurance (ESI), a private corporation, so you can rest easy, knowing your money’s safe. 
2. Higher dividend rates. Certificates offer all the security of savings accounts, but with higher yields.
3. 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, check out our Savings Rates or visit our website learn more about our different products. We’re committed to giving your money its best chance at growth!