Financial experts generally advise consumers to keep at least six months worth of expenses in savings. This ensures easy access in case of an emergency. If you have additional funds in your account, and you want to secure a higher return, investing them in share certificates may be the ideal option. Issued by credit unions, these accounts are similar to certificates of deposit. 

How Do Share Certificates Work?

A share certificate allows consumers to invest funds for a predetermined amount of time. Most credit unions require a minimum deposit of $500 or $1,000; however, you may be able to invest $100,000—or more—if you have the funds.

Until the total duration of the term has passed, you won't be able to make a withdrawal without incurring penalties. This ensures your interest rate because the credit union can depend on having those monies for a certain period of time. The precise term can range from 30 days to five years, and the longer the term, the higher the return. 

What Are the Benefits of Investing in Share Certificates?

Share certificates are ideal for first-time investors. They generally require smaller initial deposits than money market accounts, so they're much easier to acquire. Plus, because they promise a fixed interest rate for a set term, they're a stable investment. As long as you don't withdraw funds until the term has ended, you’ll earn considerably more than you would've had the money merely sat in your savings account. 

Perhaps the most significant benefit of share certificates is the fact that they're federally insured. The National Credit Union Administration insures up to $250,000 per account, thereby providing peace of mind as long as your money is invested. 

For share certificates, money market accounts, and other investment opportunities, turn to North Jersey Federal Credit Union. With three convenient branches, this credit union can handle all your banking needs. For more than 80 years, both individuals and businesses throughout Passaic County, NJ, have turned to them for comprehensive financial services. To find a branch near you, visit their website or call (973) 785-9200.