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How Certificates Can Help Your Money Grow Faster

March 9, 2016 So what are certificates? And why should you care? Put plainly, certificates are a simple, secure way to invest your money. There are specific requirements and options, but ultimately, they can help you grow your money faster than you could in a traditional savings account. So let’s dive in and learn enough about certificates for you to start achieving your savings goals. More money ahead! The Scoop: Certificates, sometimes referred to as Certificates of Deposit or CDs, are essentially timed deposits of money. It’s important to know that certificates are similar to savings accounts in that they are federally insured and, therefore, risk-free. In the U.S., they’re insured by the National Credit Union Association (NCUA) for credit unions and the the Federal Deposit Insurance Corporation (FDIC) for banks. The Purpose: Certificates help you grow your money faster. They are different from savings accounts in that certificates have a fixed-life term (frequently one, two or six months or one to five years), which comes with a fixed interest rate over the life of that term. It is common practice that certificates are held until “maturity” or until the term expires, at which time the money, and accrued interest, is withdrawn. So, in short, a certificate is a savings account that grows with interest and has to be withdrawn after a specific amount of time. The How: How can certificates help grow your yield so quickly, you ask? In exchange for keeping money for a fixed amount of time, credit unions or banks offer higher interest accrual rates than they do for regular savings accounts or accounts that can be withdrawn from or closed on demand. Conclusion: If you have a large expense coming up (like a child’s tuition fee) or need to grow some money in a relatively short amount of time (say for a new home down payment), certificates may be the best solution for you! The Back-Pocket Info: There are a few things to “keep in your back pocket” while considering certificate options:
  • Larger principals (the initial certificate deposit amount) should typically have higher interest rates, but not always—just keep that in mind.
  • Similarly, longer certificate life terms will typically garner higher interest rates—bigger the deal, bigger the return.
  • Smaller institutions typically offer higher interest rates than larger ones, but stay cognizant that they may not have as many resources or services available.
So that’s the 101 on certificates. Leverage certificates to Own your savings and financial goals, and as always, we welcome you to come talk to our financial advisors about which variety of certificate would work best for you. We have a number of options with a   and life terms. Stay savvy, savers! You might also be interested in Q: Our daughter was just born. What should we be thinking about financially? A: Your question around what to think about money-wise shows great parental wisdom. A good start is to envision what you hope she will feel in her own relationship with money in her lifetime. No one wants their kids to be fearful or ill-equipped to handle their money, but we need to envision what we do want for them if we want them to be successful. Picture your daughter responsibly handling money with comfort, contentment, enjoyment and confidence, and take actions to help her make that happen. Financial success isn’t how much money you have — it’s feeling good about what you’re doing with the money you have. It’s not every day that someone gives you hundreds, or maybe even thousands, of dollars for (seemingly) no reason. That’s what makes getting a tax return so exciting. So before that much-anticipated check arrives, stop and consider what you should do with your tax refund, as well as what you want to do. With a little planning, you may be able to actually save a little money during the holidays. Check out these tips to keep costs down without missing out on the holiday fun. Caring for your furry friends can add up! Learn how to manage the costs of owning a pet & unwanted expenses without compromising on quality for your animal. As you prepare for this new chapter of your life as a parent, make sure you are saving to cover the costs of having a baby with our financial planning checklist. Wondering how to improve your finances? Take our one-week money saving challenge and be on your way to a brighter financial future. #MoneySmartsChallenge Using less energy is good for the environment and it can help you save money on your monthly bills. Try these tips to reduce your energy use around the house. You’ve got a savings account. Good for you! But have you ever stopped to wonder if you have the right savings account? Featured Products Certificates Checking Accounts Home Equity Loans Home Loans Business Banking Certificates Checking Accounts Home Equity Loans Home Loans Business Banking Financial Education Upcoming Events Programs Tools & Calculators On-demand Webinars Podcasts Upcoming Events Programs Tools & Calculators On-demand Webinars Podcasts About Equity in Money™ About Summit Careers News Community Giving Equity in Money™ About Summit Careers News Community Giving Help & Support Contact Us Member Support Center Schedule an Appointment Find a Branch Contact Us Member Support Center Schedule an Appointment Find a Branch Please read the following before proceeding to: The website you are about to visit is solely the responsibility of the merchant or other party providing the site. The content of this third-party site, including materials and information, is solely the responsibility of the provider of the site. The Credit Union is not responsible for any such third-party content. Any transactions that you enter into with a vendor, merchant or other party that you access through this third-party site are solely between you and that vendor, merchant or other party. The Credit Union does not endorse the content contained in this third-party site, nor the organization publishing the site, and hereby disclaims any responsibility for such content. The Credit Union Privacy Policy does not apply to this third-party site, and for further information you should consult the privacy disclosures of the third-party site. NCUA Insurance Estimator Privacy, Security & Accessibility Rates, Fees, Terms & Disclosures Routing Number *  The Wisconsin's #1 Mortgage Lender designation is based on the number of loans in 2022, gathered from the Home Mortgage Disclosure Act data compiled annually by the Consumer Financial Protection Bureau. The results of the data were obtained through the LEI: 254900NTAC4H10MGSU23 **  SBA Lender of the Year Award for Credit Unions as awarded by the Small Business Administration of Wisconsin in 2023. Copyright 2024 © Summit Credit Union. All rights reserved. If you are using a screen reader and are having problems using this website, please call 608-243-5000 for assistance. Insured by NCUA