March 8, 2021Is a Share Certificate Right for Me? 

As you work to build a secure future for yourself and your family, you want to put some money aside for emergencies. But you also want to save for the things you dream of; like a vacation, a bigger house, your children’s education, and your retirement. These dreams can come true if you devise strategies that will help you live your best financial life. 

Cultivating the habit of saving is a great strategy. While making smart investments can increase your available nest egg for large purchases, it is also wise to keep some funds in risk-free savings that you can access either immediately or on a scheduled basis. A PEFCU Share Certificate is a great way to save. But there are still advantages and disadvantages. 

 Advantages of a Share Certificate 

  • Share certificates issued by PEFCU are safe; federally guaranteed by the full “faith and credit” of the U.S. government up to a limit of $250,000 per depositor. 
  • share certificate is issued in a specific amount and for a specific term (length of time). Generally, it earns a higher interest rate than a simple savings account. 
  • The interest rate stays constant for the term of the share certificate, regardless of changes in market interest rates. 
  • With multiple share certificates, you can control the availability of funds by selecting varying terms and staggering certificate maturity dates. 
  • Because the share certificate is locked in for a specific length of time, this helps save your money as you cannot easily access it. 

Disadvantages of Share Certificates 

  • In case of early withdrawal, you may pay the penalty. In most cases, you will forfeit some interest, but you might also lose a portion of the principal. Read the fine print. 
  • Inflation: A long-term share certificate will tie up your money. If interest rates rise substantially in the short term, you will not earn as much as the current rates.  

How to Choose a Share Certificate

Even though they are safe and reliable and pay a better return than other savings options, a PEFCU Share Certificate is not the perfect savings tool for everyone. Share certificates are well-suited for individuals and families who have other means of cash available for emergencies.  

A long-term share certificate is a good way to put money aside for a planned vacation, a college fund, or even for retirement, but you might not want to tie up substantial funds, especially when interest rates are still so low. Terms typically vary from as little as 90 days up to five years.   

We’re Here to Help!

Be sure to weigh the benefits of higher interest rates against the loss of liquidity for the term of the PEFCU Share Certificate. But also remember that share certificates are generally your best risk-free investment. 

 If you have questions on which savings options are best for your specific financial needs, stop by or give us a call at 1-800-226-6673. 


Each individual’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; It does not constitute legal advice. If such advice or a legal opinion is required, please consult with competent local counsel. 


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