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All You Need to Know About Share Certificates

by | Jun 27, 2023 | Education

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No one wants to play around with their savings. You work hard for your money, and if you’ve built up a sizable nest egg. Now, you’ll want to park it somewhere safe where it will have the best chance at growth.

If you’re looking for a place to keep your savings, a share certificate at Texas DPS Credit Union can be a fantastic option. These accounts offer the best of both worlds when it comes to savings — blending the growth you’d expect from a stock with the security of a savings account.

Here’s why this savings product might be the perfect choice for you:

A share certificate is a federally insured savings account with a fixed dividend rate during a fixed date of maturity. The dividend rates of these accounts are usually higher than those in savings accounts, but you’ll have more limited access to the funds. Most certificates will not allow you to add any money to the certificate after you’ve made your initial deposit and you won’t be able to withdraw your funds before the maturity date without paying a penalty.

You’ll need to meet some basic requirements before you can open a certificate, including a minimum opening balance and a commitment to keep your money in the account for a set amount of time. The specifications of these requirements vary with each institution. In general, though, the more money you invest in a certificate and the longer its maturity term, the higher the dividend rate on the certificate.

A share certificate is best for individuals who have a separate emergency fund to cover those surprise expenses. Before you open a certificate, make sure you won’t need to access the funds before the maturity date.

The advantages for getting a share certificate include low risk, higher dividend rates and locked-in rates. With each Texas DPS Credit Union certificate insured by the NCUA and ESI up to $500,000, your money is completely secure. Certificates offer all the security of savings accounts with higher yields. The APY on a certificate is set when you open the account and is locked in until its maturity date.

Share Certificates are a great option for saving your money but earning more than a regular savings account. At TXDPSCU, you could earn up to 5% APY* at a locked-in rate for 18 months. Learn more about our certificates.

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