Share:

A share certificate is a deposit of money that you are not allowed to access for a set period of time while it earns dividends. It is similar to a certificate of deposit (CD), except it is issued by a credit union rather than a bank. If you’re looking for a safe way to invest your savings, this is a smart option.

A Guide to Share Certificates

The Types

There are four main types of certificates. The basic certificate sets an interest rate at the beginning of the term, which stays fixed for the duration of the investment. This protects you if interest rates fall.

An adjustable-rate certificate allows your dividends to change along with current interest rates. This is a higher risk since your dividends may be reduced with lower rates, but you could also earn more if rates rise.

Youth certificates are designed for people under the age of 18. They typically have lower balance requirements and term lengths.

Jumbo certificates tend to provide better rates on a higher minimum balance, such as tens of thousands of dollars.

The Benefits

lincoln share certificateShare certificates are guaranteed by the National Credit Union Share Insurance Fund. This means they are a safe investment. Your dividends and your initial investment are both guaranteed, so you know precisely what you’ll have at the end of the term.

Many certificates offer the opportunity to reinvest the interest earned. If you make money on that amount, your interest for the next period will be calculated based on your higher savings total. This means that your return can be even higher than the APR advertised.

 

Spirit of America Federal Credit Union issues share certificates to their members in Lincoln, NE, and throughout Lancaster County. Your dividends are paid monthly and compounded to maximize your earnings, with options available for four, six, twelve, twenty-four, and thirty-six months. They also offer a full range of low-cost financial services, such as a checking account with no monthly service fees. Learn more about their offerings on their website. Call (402) 467-1102 with questions.

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