Share Certificates

A share certificate is the credit union equivalent of a bank certificate of deposit (CD) — a savings product where you lock away money for a set period in exchange for a guaranteed, typically higher, dividend rate.

How it works

• You deposit a lump sum for a fixed term — common terms range from 3 months to 5 years.

• The rate is locked in for that term, so you know exactly what you'll earn, regardless of what happens with rates elsewhere in that time.

• In exchange for locking your money up, share certificates generally pay higher dividends (the credit union term for interest) than a regular share savings account.

• At maturity (when the term ends), you get your original deposit back plus the dividends earned. Most credit unions let you choose to withdraw the funds, roll them into a new certificate, or add more money and renew.

Key features

• Minimum deposit: Often $500–$1,000 to open, though this varies by credit union.

• Early withdrawal penalty: If you take money out before the term ends, you'll typically forfeit some dividends — often a set number of months' worth, depending on the term length.

• Fixed dividend rate: Unlike a share savings account (where rates can float), the rate on a certificate is locked for the full term.

• NCUA insured: Just like share savings accounts, certificates are insured up to $250,000 per depositor, per institution.

Why people use them

• Safer, predictable place to grow money you don't need immediate access to

• Often used for short-to-medium-term savings goals (a house down payment, a wedding, etc.)

• A way to earn more than a regular savings account without taking on stock-market risk

A fee is incurred for early withdrawal.