3 Reasons To Open A Share Certificate

Mar 26, 2024 Personal Finances

Learn why share certificates are a compelling savings tool that boost your savings, helping with both your short- and long-term financial goals.

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Understanding how to help your money grow is essential for short- and long-term financial success. While there are various products to choose from, a share certificate can be a useful way to save and earn dividends on money that you won’t need for a particular period of time.

What Is A Share Certificate?

It’s a type of savings account where you agree to keep your money, without taking a withdrawal, for a specified amount of time – ranging from a few months to several years. In return, you’ll receive a guaranteed return on investment, typically at a higher dividend rate than traditional savings accounts – making it a beneficial tool.

Not sure if a share certificate is right for you? Here are three reasons to consider when making your decision.

How A Share Certificate Can Help You

Build Your Emergency Fund

Are you prepared to cover an unexpected expense? According to CNBC, some 44% of Americans can’t pay an unexpected $1,000 expense from savings. To help avoid turning to credit cards or personal loans, make a plan and build your emergency fund.

Experts recommend having at least 3-6 months’ worth of living expenses saved so that you’re prepared for unforeseen situations – like car repairs, medical emergencies, or even job loss. A share certificate can be an excellent tool to build an emergency fund thanks to their above-average dividend rates. Not to mention that the funds are inaccessible for a set term, taking away the temptation to spend it.

It may take time to build your savings so don’t be discouraged, it’s okay to start small.

Low-Risk Account

The U.S. Securities and Exchange Commission considers a share certificate to be one of the safest savings options. Unlike stocks or other volatile investments, they’re deemed low-risk due to guaranteed returns – assuming you hold until maturity – and your principal investment is protected regardless of market fluctuations.

Additionally, share certificates at federally insured credit unions are backed by the National Credit Union Association (NCUA) – which is backed by the full faith and credit of the U.S Government. This adds another layer of protection for you as funds up to a certain amount are guaranteed regardless of if the institution fails.

Special Features

Many financial institutions offer special certificate options, providing additional flexibility or benefits. Common incentives may include:

You can also look for zero penalties for early withdrawals or higher interest rates for longer terms. Make sure to explore all your options to determine which aligns with your financial needs and goals.


If you prioritize safety, liquidity, and predictable returns, a share certificate can be a valuable component of your overall investment strategy – especially when building an emergency fund, saving for short- and long-term goals, or preserving capital.

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Share Certificates

With terms ranging from 6 to 60 months, find the option that works best for your situation.

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