Spring has always been the season for growth and renewal. Warmer weather and brighter days bring on the perfect opportunity to look at our lives with renewed optimism — clean our homes, bust out the lawn mower and start working toward our financial goals.

Here at Spectrum Credit Union, spring is also share certificate season. We’re offering some of our highest interest rates in years to help our members’ financial goals spring forward this year.

Is a share certificate right for you? Here’s what you need to know.

What is a share certificate?

A share certificate is a type of savings account, similar to a certificate of deposit. When you open a share certificate, you make an initial deposit. That deposit is then “time-locked” for a set period. You’ll earn a guaranteed, fixed rate of return on your money throughout your time-locked period. At the end of the term, you can withdraw your funds without penalty.

Share certificates offer different term lengths. Your term limit may be 12, 14 or 18-months. This flexibility allows you to maximize your earnings potential without locking up your funds for years at a time.

However, unlike a savings or money market account that allows you to make regular withdrawals, you could face an early withdrawal penalty if you need access to your funds before your term is up.

Pro tip: Sound familiar? A share certificate is like a Certificate of Deposit (CD) with one notable exception: Banks offer CDs insured by the FDIC while credit unions offer share certificates backed by National Credit Union Association (NCUA).

3 reasons to invest in a share certificate now

In the current economic climate, share certificates come with benefits.

Reach your financial goals faster 

Inflation typically drives up interest rates on savings accounts. So, when inflation is on the rise (like it is now), it is a good idea to build out your emergency fund in your savings account. You’ll have penalty-free access to funds you might need and earn more on it.

But if you have money you’re saving for longer-term goals, a share certificate offers a higher rate of return than a basic savings account. If you can wait out the term period, you’ll reach your savings goals faster.

Lower your investment risk

With the economy feeling volatile and talks of a recession on the way, investing can feel uncertain. A share certificate offers a fixed rate of return, meaning you’ll earn the same, no matter what the economy does throughout your term.

Pro tip: Spectrum Credit Union locks in guaranteed share certificate rates from three months up to five years. 

Start earning more for less

Share certificates also often offer lower initial deposit rates than other savings vehicles like money market accounts. Spectrum Credit Union members can open a share certificate with as little as $500.

While you can make a larger initial deposit, having the option to get started at a lower funding limit can help you start earning more, sooner. Check out our Share Certificate Analyzer to calculate your potential dividend growth and tax liability for different deposit amounts.

Bottom line

A share certificate can be a great way to earn a higher guaranteed rate of return on your savings. The more you can earn, the faster you can reach your financial goals. But to take full advantage of the savings opportunity, you’ll need to read your terms carefully. Early withdrawal penalties can take a chunk out of your earnings.

Spring is around the corner, but great rates are already blossoming at Spectrum Credit Union. Until March 31, 2023, members can earn top-of-the-market rates by opening a new share certificate. Through our 14-month Five-Star Certificate Special, you’ll earn 5% APY. Our members deserve the best! Don’t miss your chance to lock in one of the best rates in the country with this limited-time offer.