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What Are Share Certificates & How Do They Work?

Share certificates are a savings option offered by credit unions like 3Rivers, designed to grow your money by a higher dividend (interest earned) than regular savings accounts over a set period of time. Share certificates work in the same way certificates of deposits (CDs) do; the main difference is that share certificates are offered by credit unions and CDs by banks.

Stacks of coins growing in height.

How long does it take to grow my money with a share certificate?

Typically, share certificates are offered for a period of a few months up to five years; and in most cases, the longer the term, the higher the dividend. Some options have a pre-set term while others allow you to choose.

In order to get the most from your deposits and grow your money to its full potential, there are usually tighter restrictions around withdrawing from the account early. Early withdrawal penalties vary by credit union and by product. For this reason, you'll want to be sure the funds you invest in your share certificate are funds you won't be needing in the immediate future.

If you're concerned you may need to access funds before the maturity date, you might consider opening multiple certificates. By separating your funds into multiple certificates, you can stagger their maturity dates, ensuring you have a rolling release of funds. And if you need to withdraw funds early, you can do so by focusing on the certificate with the lowest fee and forego paying a fee against all of the funds you’ve invested in certificates.

How do rates work with share certificates?

Like with certain loans, there are fixed and variable rate certificate options. That is, some share certificates lock in the rate at the date of opening and continue to earn that rate throughout the entire term. This is great if the interest rate is high at the time of opening your certificate and you want to ensure you're earning that higher dividend over time, even if rates fall later on. Variable rate certificates are less common, but with these, rates fluctuate with the market. Other options, like bump rate certificates, are fixed, but give you the option to "bump" the rate one time during the life of the certificate should rates increase.

One way to ensure you’re rewarded regardless of the rate environment is to open a mix of short-term and long-term certificates. While short-term certificates typically earn less, if the rates increase, you’re able to take advantage of those increased rates when your short-term certificates mature. If the rates decrease, your long-term certificates remain at their interest rate until maturity, allowing you to earn more over a longer period of time.

How much do I need to open a share certificate?

A common myth when it comes to share certificates is that you need a large sum of money to get started. While this may be the case with some accounts, others, like our Any Purpose Savings Certificate, require a much smaller starting investment (at the time of this post, you can open our Any Purpose Savings Certificate with as little as $25.00)*! 

Are share certificates insured?

Like other savings products offered by federally insured credit unions, share certificates are guaranteed by the National Credit Union Administration (NCUA), meaning you can rest assured that your deposits are safe.

How do I know which certificate option is right for me?

Here are some key questions to ask yourself when choosing a share certificate option best suited for you:

  • How much money are you comfortably able to invest?
  • How long are you willing to wait for the certificate to mature?
  • Would you prefer a fixed or variable rate?
  • Are you willing to pay a fee should you need to withdraw funds early?

Fortunately, we have plenty of share certificate options for any combination of needs and preferences you may have!

Ready to start growing your money with a share certificate? Check out our certificates and current rates by clicking here.

Open Your Share Certificate Today!

Wondering which certificate option is right for you? We're happy to answer any questions you may have and help you decide.

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* Any Purpose Savings Certificate: Limited time offer and subject to discontinuation at any time without advance notice. Allows accountholder to select a term ranging from 6 to 24 months. Upon renewal, will renew at a 3-month Term. This certificate allows for the accountholder to add funds throughout the term of the certificate.

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