Guarantees in life are hard to come by. When it comes to investing, they can be even harder. That’s why share certificates are particularly attractive to those searching for a low-risk investment option with a guaranteed return.
What is a share certificate?
A share certificate is like a certificate of deposit or CD, except share certificates are issued by credit unions. The benefits of a share certificate investment are fixed rates and defined terms. Essentially, you know exactly what you’re going to get for your investment. Share certificates are commonly issued for one- to five-year terms, and rates are usually fixed.
Low minimum balance
With several options offering a low minimum balance requirement, share certificates fit a wide variety of budgets and are extremely accessible entries into the investment world. With as little as $1,000, even the most novice of investors could open a share certificate and choose from a range of competitive rates and terms.
Varying term lengths
Term lengths vary from provider to provider, but most share certificate terms are one- to five-year commitments. Typically, the longer the investment term the higher the yield. Unlike a savings account, accessibility to the funds is limited and in most cases, there are fees for early withdrawals. The rewards for your commitment to the investment are better rates and guaranteed returns.