What is a Certificate and Why YOU Should Get One

By Blake Terry AVP, Deposit Products at Mountain America Credit Union

In your quest for financial security, you’ve likely heard of something called a certificate—but you may not be clear about what it is exactly. That’s okay, you’re not alone. Certificates, while incredibly valuable, are not often discussed among friends, family or even some financial advisors.

What is a certificate?

Certificates are a great way to earn competitive dividends on safe, long-term investments. Set aside funds for a designated period of time – usually between six months and five years – and you receive a higher dividend rate than with a traditional online savings account.

Why you should get one

The higher dividend rates make them ideal for a variety of savings options. Set aside a small amount, let it grow, then use it when you need it most. Think of it like a retirement 401(k) or Roth IRA, only you decide the deposit amount and term length.

Even if retirement isn’t your immediate concern, certificates are a great way to earn more dividends for the future. Set it and forget it for up to five years—then roll it over into a new five-year certificate and watch it continue to grow. It can also help you save money for other important financial goals, like a down payment on a new car or your dream home.

Certificates are perfect for those looking to save without the hassle of constantly monitoring an account. And they’re also a perfect teaching tool for someone new to financial management—like kids and teens.

The point is simple: once money is deposited into the account, it’s meant to remain there, totally untouched, for the life of the certificate, so it can earn the highest possible dividends. Whatever your financial goals may be, certificates can help you reach them.

Just visit your financial institution’s nearest branch and choose a certificate length—six, 12, 18, 24 or 30 months, or go for three, four, or five years. You can even decide to have dividends paid quarterly, bi-annually, annually or at the time of maturity.

It’s so easy to set up

Setting up a certificate is incredibly simple to do. Once you’ve opened it at your local branch, you don’t have to do anything until it reaches its maturity date. You don’t make any deposits or set up any withdrawals, and, most importantly, it’s worry-free because the dividend rate is locked in place. That means your money won’t fall victim to hostile stock market falls like it can in other savings or investment accounts.

Need a little more flexibility?

If you like the idea of a certificate, but you want to add money to your account along the way, check out something new from Mountain America Credit Union. The Growth Certificate account allows you to still get all the certificate options, while continuing to add funds anytime—you can even automate the deposits to make things easy.

As a parent, setting up a Growth Certificate account for your kids is great for friends or family members who want to give money for birthdays and holidays. Or, maybe your teen has decided he wants to go on a school trip in a couple of years—this account allows him to deposit money whenever he wants and he’ll earn dividends, too.

Help your kids develop a habit of saving

All the experts agree—the earlier you get into the habit of saving money, the better the chance you’ll continue the habit throughout your life.

Give your kids the gift of a healthy financial start by getting them a youth certificate. The process is easy to follow, and they can learn as they go. At Mountain America, these accounts can be started with as little as $5 and, like the Growth Certificate, you can add more money whenever you want.

Check into what Mountain America has to offer and move forward to a better future. Make certificates part of your broader investment strategy today!

*Insured by NCUA. Early-withdrawal penalties may apply. Each member is limited to $100,000 in any one or combination of Growth Certificates or youth certificates accounts. Fees may reduce earnings on account.