What are Share Certificates Credit Union?

What are Share Certificates Credit Union?

Your guide: What are Share Certificates Credit Union?

Credit unions provide share certificates, sometimes referred to as credit union certificates, as a well-liked savings tool. They function similarly to bank-issued certificates of deposit (CDs), except they frequently have higher interest rates.

Compared to ordinary savings accounts, investing in a share certificate can be a wise method to increase the return on your funds. You will learn about share certificates in this article, including their functions and advantages.

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What are Share Certificates Credit Union?

Understanding Share Certificates

Credit unions provide a sort of savings account called share certificates. Upon purchasing a share certificate, you commit to keeping your funds in the account for the duration of the specified term.

When compared to standard savings accounts, the credit union provides a greater interest rate in exchange. These accounts are secure investments because they are insured by the National Credit Union Administration (NCUA).

Higher Interest Rates

The higher interest rates offered by share certificates are one of their key benefits. Since credit unions are member-owned and non-profit, they usually provide better rates than regular banks.

The share certificate’s term length determines the interest rate you will get. Longer durations typically have greater rates. Because of this, share certificates are a desirable choice for people who want to increase their profits.

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What are Share Certificates Credit Union?

Term Lengths and Early Withdrawals

Share certificates are available in a range of lengths, from a few months to many years. Selecting a term that fits your needs and financial objectives is crucial. Remember that there are usually penalties associated with early withdrawals from a share certificate. The principal amount as well as the interest generated may be decreased by these penalties. It is therefore essential that you invest money that you intend to keep in reserve until the end of the period.

How Share Certificates Work

When you open a share certificate account, a particular amount of money is deposited for a predefined period. During this period, interest is applied to your funds at a predetermined rate.

When the time concludes, at maturity, you can take your original deposit back along with the interest. You might also choose to reinvest the funds in new share certificates.

What are Share Certificates Credit Union?

Comparing Share Certificates and CDs

Though they are similar financial products, share certificates and CDs differ significantly in a few important ways. Both have fixed interest rates and stipulate how long you must keep your money in the account.

On the other hand, CDs are provided by banks, whereas share certificates are exclusively available through credit unions. Compared to bank CDs, credit unions frequently provide better interest rates on share certificates since they are member-owned institutions.

Considerations Before Investing

Take your needs for liquidity and your financial objectives into account before purchasing a share certificate. A shorter-term share certificate or a standard savings account would be a better choice if you think you might need to access your money before the term expires. To get the greatest bargain, also evaluate the terms and interest rates that various credit unions are offering.

How to Open a Share Certificate

It is simple to open an account with a share certificate. To begin with, you must be a credit union member. After opening an account, you can invest in a share certificate by selecting the desired term and making the necessary investment. The majority of credit unions provide both in-person and online share certificate opening options.


A great option to increase the interest rate on your savings while maintaining the security of your funds is via share certificates. Gaining knowledge about share certificates and their functions will help you make wise choices and optimize your profits.

Credit union share certificates are a dependable and profitable choice for anyone wishing to develop their emergency fund or save for a long-term goal. Never forget to evaluate terms and rates and select the one that best fits your budget. Cheers to saving!