What Is a Share Certificate (CD)?

A share certificate is a temporary savings account offered by a credit union that—just like a certificate of deposit (CD) at a bank—saves a sum of money with a locked-in interest rate over a fixed period of time. Even if interest rates go down, your CD’s rate stays the same, so you keep saving at a competitive rate.

How Do Share Certificates (CDs) Work? 

Think of a CD as a temporary savings account that helps your savings grow faster with higher-than-average rates. Unlike a savings account, however, you cannot withdraw money from a CD before the term is up without a penalty (usually a fee).

A CD’s interest rate is called the Annual Percentage Yield, or APY. The Annual Percentage Yield gives you dividends, or earnings, that build up either daily or monthly, based on your deposit.

Common CD terms range from ninety days to five years. If you withdraw funds before the CD’s term ends, you usually have to pay a penalty.

When your CD’s term is completed, which is typically known as maturing, you can withdraw your money or create another. Some CDs automatically roll over into another one, which means you can effortlessly continue saving if you choose to. After your CD matures, you usually have a grace period where you can make an informed decision about your funds without having to rush.

What Are the Benefits of a Share Certificate (CD)?

When you open a CD, you are encouraged to save money, because you are not supposed to withdraw money as you would with a regular savings account. Plus, you save better with high rates, many term options, and more.

CDs usually have:

  • Higher rates than regular savings accounts
  • A wide range of term options
  • Low minimum deposits to earn dividends
  • The assurance that you will save money even when interest rates shift
  • Federal insurance, which means your money is protected.

Should I Get a Share Certificate (CD)?

Consider opening a CD if you have an amount of money that you can comfortably save without needing to make withdrawals. Keep in mind that once you place money into a CD, you typically cannot take it out without having to pay a penalty fee.

CDs are also useful if you have a big purchase coming up that you want to be sure you can save well for.

How Do I Get a Share Certificate (CD)?

To get a share certificate (CD):

  1. Become a credit union member. A credit union membership lets you open share certificates and offers many other benefits. Depositors at a credit union are member owners, which means they get great dividends and personal support to achieve their goals.
  2. Compare a few share certificate options. You want to choose the term that works best for you, with the best possible rate.
  3. Apply for the share certificate of your choice, deposit your money, and watch it grow!

As a Credit Union 1 member, you will always get a great share certificate rate and have expert team members behind you every step of the way. You can open a share certificate online, in person at your local branch, and over the phone.

Not a CU1 member? Join today in minutes to access our share certificates and more benefits.



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