Defining a Share Certificate
Why It's More Than Just a Savings Account
For many, managing investments and finance can be stressful or even overwhelming. But it doesn’t need to be this way. Author Robert Kiyosaki once said, “Let the money work for you.” Such a simple adage gets to the heart of money management and what it hopes to achieve - growing your wealth without overextending yourself. Ideally, without any additional work at all.
So what do share certificates have to offer? In short, they are designed for those who want to build their existing cash balance into more wealth over time with ease and minimal effort.
Share certificates offer a fixed dividend rate with a set time commitment, after which the initial deposit and any dividends earned are returned in full. With their fixed dividend rates and at least $250,000 worth of insurance courtesy of the NCUA, they are often seen as one of the most secure investment strategies available.
In many ways, share certificates are similar to other long-term savings accounts, like CDs. However, the main difference between CDs and share certificates is that share certificates are offered by Credit Unions like Austin Telco Federal Credit Union, while CDs are offered by banks. In addition, credit unions, unlike banks, are member-owned and non-profit in nature. Credit Unions utilize their profits to offer high-quality, competitively rated options for their members, as well as better dividend earnings on the share certificates they offer.
People often use these accounts for planning purposes, whether for graduations, future vacations, or a nest egg for later in life. Think of it as putting money away in a safe, where it keeps multiplying and compounding upon itself. Whatever your goal, share certificates are a great way to grow your wealth without having to do any additional leg work yourself. Simply put the money aside and watch it grow!
Need Help or want to Learn More about Share Certificates? Speak to one of our Member Specialists today!
The Timeline of a Share Certificate
How To Choose The Right Plan For You
Choosing the right share certificate in Greater Austin to put your money into comes down to one element: time. Some share certificates can last for as little as three months, while others can last as long as five years. The takeaway from this is that the longer the time, the greater the dividend rate. By that logic, a 12-month certificate will have a lower dividend rate than a 24-month certificate. Available terms and rates for share certificates will be readily available information, which you can use to compare different options before selecting the best one for you.
Depending on the details of your investment, you can also achieve additional compounding benefits. The longer a certificate develops, the more opportunities for the money to compound, increasing your returns over time. It can compound yearly, quarterly, or even monthly! It all depends on the terms you set with your credit union.
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Plan Your Share Certificate Term Wisely
Avoid Early Withdrawal Penalties
Some investment options are designed to help you stay the course. This means deferring early withdrawals that can undermine your ability to earn the full benefit of your investment strategy. Similarly, this holds true for share certificates as some people are unable to wait three to five years for their money to grow before they need to access it. That’s ok! This is another advantage of share certificates because of their flexibility to offer shorter-term options for our members.
It is important to note that with share certificates, removing any money in the account before the agreed time has passed will result in withdrawal penalties. If you need flexibility with your share certificate strategy, our member service associates can help you decide. Let Austin Telco help you find the right share certificate terms to best suit your short-term and long-term needs.
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Why Now Is The Best Time To Act
As other forms of investment like stock trading go through great fluctuations, the stability of share certificates has become appealing to many investors. The fact that they don’t go through the same volatility that other forms of investing, gives investors more confidence that they will see consistent returns on their investment. If you’re planning on diversifying your investment portfolio, selecting a high-yield share certificate can be beneficial by offering you a steady financial foundation that you can count on regardless of the financial marketplace.
Timing your initial investment is still important to ensure you get the best deal possible. While there is no bad time to start growing and investing your money, catching the market when rates are high allows you to lock in a favorable rate that won’t change even when the market shifts. With our current attractive rates, now is the time to act.
Interested in exploring Austin Telco Federal Credit Union Share Certificate Rates? Let’s Talk Today!
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Connect with a Financial Expert at Austin Telco Today!
At Austin Telco Federal Credit Union, we work hard to ensure you receive the best service and care possible. So, if you are interested in learning more about share certificates or our other services and investment options, please call us today! Our team will happily work with you to find the best solution for your needs.