A Share Certificate can be a fantastic savings option, blending the growth you’d expect from a stock with the security of a savings account.
What is a Share Certificate account at a credit union?
A share certificate is a type of savings account that offers a fixed dividend (Annual Percentage Yield) for a fixed term (fixed period of time). Share certificate rates are typically higher than the rates offered on standard savings accounts because you’ll have limited access to your funds.
The dividend 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 account's initial term to a specified certificate selected by the financial institution.
How does a Share 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 dividend rate. Take a look at Jovia’s certificates to see examples of account terms and dividend rates here.
When the term is up, your certificate has matured. You can choose to withdraw your money and deposit it in another account, such as a savings or checking account, or renew your certificate, putting the funds back into the certificate term. At maturity, your funds are your initial deposit plus any accrued dividends.
Are Share Certificates safe?
A Share Certificate is a federally insured savings account. This means your funds are protected should something happen to your finances. Also, since the dividend 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 Share 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 account? Open today!