Good reasons to invest in Certificate accounts
A Certificate account is is a type of savings account that has a fixed interest rate and a predetermined date when you can withdraw funds, known as a maturity date. They are ideal for people who don’t want to risk losing the original money they invested (also known as principal).
Like other savings accounts, Certificate accounts are federally-insured by the National Credit Union Association (NCUA) up to $250,000 and backed by the full faith and credit of the United States.
Here are three situations when Certificate accounts may be more attractive than other forms of savings and investment:
Take advantage of high interest rates
Certificate accounts are be a safe way to save money for your future, especially if they offer a higher interest rate and APY than a high-yield savings account or money market account. You are guaranteed a return on your money. Use our savings calculator to estimate how much you can save with a Certificate.
Invest during periods of market volatility
Nervous investors may find the Certificate account an attractive investment vehicle when the short-term outlook for the stock market is uncertain. Certificate accounts are insured up to regulatory limits by the National Credit Union Association (NCUA), so you can’t lose the money you initially put into a Certificate account, even if you withdraw early and have to pay a penalty.
Oregon State Credit Union Certificate accounts allow you to name a “Payable on Death” beneficiary. In the event of death, your beneficiary can redeem the Certificate account without penalty before the Certificate account matures.
Save money for future needs
Certificate accounts are ideal for people who anticipate making a large purchase in the near future. If you plan to buy a vehicle in a year or two or make a down payment on a house, and you know you’ll need the funds, putting that money in a 12- or 24-month Certificate account guarantees you’ll have the money when you need it, plus interest.
If you’ve tried saving money before but always end up spending it, investing in a Certificate account can lock-in your money and discourage you from using it knowing you’ll have to pay an early-withdrawal penalty.
