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Debunked: 5 Common Certificate Misconceptions

Jul 10, 2019, 17:17 PM by JV Zamora

5CommonMisconceptions_072019
Are you on the hunt for a secure way to grow your money? You may want to consider a Certificate. In a nutshell, a Certificate is a safe way to save money for a fixed period of time at a specified interest rate.  But more than that, a Certificate is designed to increase your savings because regardless of what the market does, the money put in to the certificate grows thanks to a little thing called interest. 

But despite us glorifying certificates, you may have heard some misconceptions about Certificate investments. Here are some reasons why you might want to reconsider this “set it and forget it” way to earn:

You don’t need to be rich in order to get a great rate

You don’t need a six-figure salary to start saving with a Certificate. Most credit unions offer this product without requiring a ridiculous minimum deposit, U.S. Eagle included! Start saving with as little as $1,000!

“See you soon” instead of goodbye

Bet you didn’t know you could open a CD with a commitment as short as 3 months? Of course, if you won’t need your funds that soon, you can earn a higher interest rate if you choose a longer term. Personally, we recommend our 12-month Certificate Special. With a great rate, and a relatively short term, you’ll be saying “see you soon” instead of “goodbye” to your money.

They’re risky

Unlike the stock market, your certificate balance is insured by the NCUA for up to $250,000. That’s about as safe as it gets.

They don’t offer a big return

Sure, a Certificate won’t give you the same returns as a game-changing stock purchase, but remember, your earnings are guaranteed (no matter how the market fares). Certificates can also be a great way to earn interest while saving for a longer-term goal, such as a wedding, college education or a down payment on a home. 

My savings account is all I need

Only if you need your funds to be readily available at all times. Otherwise, remember you can earn more by investing your money in a certificate for as little as 3 months. Plus, with a Certificate, you won’t be as tempted to spend what you’ve worked so hard to set aside.  

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