January 26, 2024Why Now Is the Perfect Time to Save with Share Certificates

Rising loan rates and inflation have taken a financial toll on households nationwide. Fortunately, it’s not all bad news. You may have noticed that savings rates have also been climbing steadily in recent months. This scenario creates the perfect opportunity to earn greater returns through share certificates. 

Share certificate accounts, commonly called certificates of deposit, are found in portfolios among investors of all ages because of their earning potential and limited risk. As yields continue their upward trend, now might be the perfect time to put share certificate accounts to work for you. 

Benefits of Share Certificates  

Share certificates have always been a great, low-risk way to grow your savings. Compared to other savings and investment options, they may not seem the most exciting. However, their stability has stood the test of time. Given the unpredictability of today’s economy, the popularity of share certificates is once again on the rise. Let’s explore the most significant benefits of share certificates so you can decide whether these accounts make sense in your financial portfolio.  

  • Fixed Interest Rates  

Most high-yield savings products have variable rates that fluctuate with the overall economy. Share Certificate rates, on the other hand, are locked in for the entire account term. This feature is especially beneficial in the current financial landscape of high-interest rates and fiscal uncertainty. With today’s volatile economic climate, the stability provided by share certificates makes them an excellent choice for investors who want consistent returns over the coming years. 

  • Greater Earning Potential 

Share certificates offer higher dividend rates compared to other investment account types. While traditional savings and money market accounts are ideal when you need instant access to funds, their earning potential is somewhat limited. Because your money is locked in with a share certificate, you’ll earn substantially more on your investment throughout your term.  

  • Low Deposit Requirements  

It’s true that there are “jumbo” certificates that require large deposits. However, most share certificate accounts only require a minimal deposit, such as $500. This characteristic means you don’t need to invest a significant amount of money to earn higher returns. For example, if you have $2,000 in your savings account, you could invest $1,000 into a certificate and keep the other half in savings for short-term needs. 

PEFCU’s 6-month share certificate only requires a $500 deposit and we also offer a Youth Share Certificate for members under 18 years of age that only requires a $100 deposit.** Learn more here. 

  • Flexible Terms  

Certificate terms generally range from six months to five years. So, you can choose the term(s) that best match your financial goals.  

Typically, the longer the term, the more you’ll earn. But that’s not always the case. For example, financial institutions needing to raise deposits often offer special promotions – allowing you to earn high yields on shorter-term investments. 

  • Goal-Matching Strategy 

A significant perk of investing with share certificates is that you aren’t limited to only one account. You can have multiple share certificates open with varying terms to match your financial goals. For example, you might have a 6-month certificate earmarked for next year’s summer vacation and a 3-year certificate as money for a down payment on a new car later. 

You can also incorporate “certificate laddering,” where you stagger your investments instead of locking all your funds into one account. Investors use this strategy in a rising-rate environment to ensure they always have money coming due annually – enabling them to take advantage of higher rates in the future. To illustrate this tactic, review the following example: 

Imagine you have $10,000 to invest. Instead of placing all $10,000 into one longer-term certificate, you stagger the funds. The following chart is an example and does not reflect PEFCU share certificate offerings and is not considered financial advice.  

Investment Amount  Certificate Term 
$2,500  12 months 
$2,500  24 months 
$2,500  36 months 
$2,500  48 months 


  • Guaranteed Returns 

The security of your funds is always a priority. The best part about investing your money into a share certificate account is the peace of mind it provides. Unlike the volatility of the stock market and other investment options, your share certificate account comes with a locked-in rate, so you know exactly how much you will earn during the term. Plus, your funds are federally insured by the National Credit Union Administration (NCUA) up to at least $250,000.  

We’re Here to Help! 

With the economy being so unpredictable, now is the perfect time to lock in greater earning potential through share certificate accounts. Whether you’re nearing retirement or simply want to add investments with guaranteed returns to your financial portfolio, share certificates are a popular choice.  

If you’re ready to open a share certificate account or want to discuss how to best use these accounts to your advantage, we’re ready to help. You can open an account online, by calling us at 800-226-6673, or by stopping by one of our convenient branch locations.  


** The dividend rate and APY may change after the account is opened on all share accounts. The dividend and APY may change on all share certificate accounts at maturity. Penalties may be imposed for early withdrawal. Minimum share certificate balance required to obtain stated APY. 

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; the authors assume no legal responsibility for the completeness or accuracy of the contents.  

Federally Insured by NCUA

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