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Share Certificate 101: What to Know about Saving Options

With so many financial products available, choosing which type of account to open can be stressful. For members looking for earnings on their savings, one of the options that credit unions offer is share certificates. 

A share certificate allows you to earn high interest rates by agreeing to leave money in a credit union for a specified time. 

Share certificates are the credit union equivalent of a bank’s certificate of deposit, or CD. When opening a share certificate or CD, members invest their money for a specific time, earning higher interest and dividends in their account. 

Principal: The money you initially deposit into the account 

Whether you have a couple hundred or a few thousand dollars you want to invest, there’s a share certificate option for you. The amount you put into the certificate is called the principal. As long as you keep your money invested for the agreed-upon time, you will always receive your principal plus extra when the certificate matures. 

La Cap has several share certificates with different minimum opening amounts, so you can find one that best fits your needs. 

Term: The length of time the funds are required to be invested at the credit union 

You determine how long you want to invest your money, which is called the term. Share certificate lengths can vary from three months to five years. La Cap has several term lengths to choose from, so you can find one that best fits your needs. 

It’s important to pick a share certificate with the right timeframe for you. Decide how long you’re comfortable investing your money and find a share certificate with that timeline. If you discover later that you need the money and withdraw it before the term ends, you’ll pay a penalty fee. 

Annual Percentage Yield (APY): The percentage of your principal that you earn on your certificate

The reward is a dividend or interest rate that exceeds traditional savings accounts. The interest rate and annual percentage yield determine how much you earn on a certificate. Generally, a longer term gets a higher rate. 

Date of Maturity: The date you’re allowed to withdraw your money, which includes your principal and earned interest, without penalty 

When a certificate matures, you decide what to do with the money. There are two main options: 

  • Cash-out. The credit union will move the money into your account or pay you in the form of a check. 
  • Roll it over. You can reinvest your money in another certificate for the same term and at the current rate, which may be larger or smaller than your previous certificate rate. 

Earn More in the Long Run at La Cap 

Lock in quality rates for long-term savings with one of our share certificates. We offer many different options, so you can find one with a timeframe and minimum deposit that best fits your needs. 

Explore La Cap Share Certificates

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