A term certificate can be a fantastic option when it comes to savings — blending the growth you’d expect from a stock with the security of a savings account.

What is a Term Certificate account at a credit union?

A term certificate is a type of savings account that offers a fixed interest rate (Annual Percentage Yield) for a fixed term (fixed period of time). Term certificate rates are typically higher than the rates offered on standard savings accounts because you’ll have limited access to your funds.

The interest rate will not change during the term unless you have a product called a Bump Certificate. This allows you to bump up your certificate rate once during the initial term of the account to a specified certificate selected by the financial institution.

How does a Term Certificate work?

In exchange for depositing your money into an account for a fixed amount of time, a financial institution, like Jovia, pays a fixed interest rate. Take a look at Jovia’s certificates to see examples of deposit terms and interest rates here.

When the term is up, this means your certificate has matured. When your certificate has matured, you can choose to withdraw your money and place it in another deposit account such as a savings or checking, or renew your certificate, placing the funds back into the certificate term. At maturity, your funds are your initial deposit plus any interest that has accrued.

Are Term Certificates safe?

A term certificate is a federally insured savings account. This means your funds are protected should something happen to your finances. Also, since the interest rate is fixed and does not fluctuate based on the stock market, your return is guaranteed. These conditions make certificates low-risk investments.

Is a Term Certificate right for me?

If you are looking for a reliable and guaranteed way to grow your savings and can afford to lock up your money for a certain period, a certificate account is a great option. However, it is important to remember that if you do need to access your funds before the term ends, you are subject to an early withdrawal penalty. Please refer to our disclosure here for information about a penalty associated with withdrawals prior to maturity.

What are the terms and minimum balance requirements?

At Jovia, a certificate account can be opened with a minimum of $100. We have a variety of terms ranging from 3-Months to 5-Years.

Ready to open a Certificate of Deposit account? Apply today!