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Why Now Is the Perfect Time to Save with Certificates

Rising loan rates and inflation have taken a financial toll on households nationwide. Fortunately, it’s not all bad news. You may have noticed that savings rates have also been climbing steadily in recent months. This scenario creates the perfect opportunity to earn greater returns through certificates.

Share certificate accounts, commonly called certificates of deposit, are found in portfolios among investors of all ages because of their earning potential and limited risk. As yields continue their upward trend, now might be the perfect time to put share certificate accounts to work for you.


Benefits of Certificates

Certificates have always been a great, low-risk way to grow your savings. Compared to other savings and investment options, they may not seem the most exciting. However, their stability has stood the test of time. Given the unpredictability of today’s economy, the popularity of certificates is once again on the rise. Let’s explore the most significant benefits of certificates so you can decide whether these accounts make sense in your financial portfolio.


  • Fixed Interest Rates

Most high-yield savings products have variable rates that fluctuate with the overall economy. Certificate rates, on the other hand, are locked in for the entire account term. This feature is especially beneficial in the current financial landscape of high-interest rates and fiscal uncertainty. With today’s volatile economic climate, the stability provided by certificates makes them an excellent choice for investors who want consistent returns over the coming years.


  • Greater Earning Potential

Share certificates offer higher dividend rates compared to other investment account types. While traditional savings and money market accounts are ideal when you need instant access to funds, their earning potential is somewhat limited. Because your money is locked in with a certificate, you’ll earn substantially more on your investment throughout your term.


  • Low Deposit Requirements

It’s true that there are “jumbo” certificates that require large deposits. However, most certificate accounts only require a minimal deposit, such as $500. This characteristic means you don’t need to invest a significant amount of money to earn higher returns. For example, if you have $2,000 in your savings account, you could invest $1,000 into a certificate and keep the other half in savings for short-term needs.


  • Flexible Terms

Certificate terms generally range from six months to five years. So, you can choose the term(s) that best match your financial goals. The following chart illustrates how certificate rates are usually displayed:

Certificate Term Dividend Rate (APY)
6 months 2.50%
12 months 3.00%
24 months 3.50%
36 months 4.00%
48 months 4.50%
60 months 5.00%

Typically, the longer the term, the more you’ll earn. But that’s not always the case. For example, financial institutions needing to raise deposits often offer special promotions – allowing you to earn high yields on shorter-term investments.


  • Goal-Matching Strategy

 A significant perk of investing with certificates is that you aren’t limited to only one account. You can have multiple certificates open with varying terms to match your financial goals. For example, you might have a 6-month certificate earmarked for next year’s summer vacation and a 3-year certificate as money for a down payment on a new car later.

You can also incorporate “certificate laddering,” where you stagger your investments instead of locking all your funds into one account. Investors use this strategy in a rising-rate environment to ensure they always have money coming due annually – enabling them to take advantage of higher rates in the future. To illustrate this tactic, review the following example:

Imagine you have $10,000 to invest. Instead of placing all $10,000 into one longer-term certificate, you stagger the funds.

Investment Amount Certificate Term
$2,500 12 months
$2,500 24 months
$2,500 36 months
$2,500 48 months


  • Guaranteed Returns

 The security of your funds is always a priority, but in the wake of recent bank failures, we know that it’s now more important than ever. The best part about investing your money into a certificate account is the peace of mind it provides. Unlike the volatility of the stock market and other investment options, your certificate account comes with a locked-in rate, so you know exactly how much you will earn during the term. Plus, your funds are federally insured by the National Credit Union Administration (NCUA) up to at least $250,000.


We’re Here to Help!

With the economy being so unpredictable, now is the perfect time to lock in greater earning potential through share certificate accounts. Whether you’re nearing retirement or simply want to add investments with guaranteed returns to your financial portfolio, certificates are a popular choice.

If you’re ready to open a certificate account or want to discuss how to best use these accounts to your advantage, we’re ready to help, and you can learn more at  Please stop by any of our convenient branch locations or call 618-457-3595 to speak with a team member today. You can also schedule at appointment at


Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.

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