What's a Share Certificate? 4 Facts to Know.

When it comes to growing your savings, share certificates may be a good option—though they’re often confused with certificates of deposit (CDs). At first glance, the two might seem similar, but they're not one in the same.  
 
Here, we break down what share certificates are, how they work, and why they might be a fit for your savings goals. 
 

1. Share Certificates Are a Type of Savings Account 

A share certificate is a fixed-term deposit offered by credit unions, much like a certificate of deposit (CD) at a bank. When you invest in a share certificate, you agree to leave your money in the account for a set period of time, typically ranging from a few months to several years. In return, you may earn a dividend rate that's typically higher than what you'd find in a regular savings account. 

 

2. They're Issued by Credit Unions, Not Banks 

Unlike CDs, which are offered by banks, share certificates are extended by credit unions. This can offer some advantages, such as potentially better dividend rates and a more personalized experience for members.  

 

3. Fixed Term and Rate 

The key feature of a share certificate is its fixed term. Once you invest, your money will be committed for the duration of that term—whether it's six months, five years, or a different term. The dividend rate is locked in at the time of investment, so it won’t fluctuate with market changes. 

 

4. Save with a Fixed Goal in Mind 

Share certificates may be ideal for individuals looking to save for a specific goal—whether that’s a down payment on a house, a new car, or even an emergency fund. With their potentially higher dividend rates, share certificates may help you grow your savings steadily without the risk of losing your initial investment.

Ultimately - share certificates can provide a means for secure, predictable savings. If you’re ready to explore their benefits, Empower Federal Credit Union offers competitive rates to help you meet your financial goals.