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What is a Share Certificate?


Financial institutions offer so many saving options it can be overwhelming to know which one is right for you. If you want to save money and allow it to grow while in savings, a certificate is an option to consider. A share certificate allows you to grow your money at a credit union for a certain amount of time by earning dividends on your savings. 

Share certificates are a safe way for your money to grow with minimal risk, unlike stocks that have more risk or low or no interest savings accounts that don’t grow your money. Understanding how share certificates work is easy so you can make an informed decision about choosing a credit union’s share certificate for steady and predictable financial growth. 

A benefit of saving money through a certificate is your earnings are consistent during the chosen term  and won’t be affected by the changes occurring in the market. Arkansas Federal Credit Union is here to help you through your financial journey and we make saving easy. Call us or stop by one of our local branches today to speak with us and learn more about our share certificates

Certificate Of Deposit vs Share Certificate

When looking for an easy and safe way to store your money, there are a multitude of options for saving. You’re probably familiar with a certificate of deposit (CD) and may be wondering what a share certificate is and how it differs from a CD.

While both certificates function very similarly in that you put money into a certificate for a specific period of time and get a set return on that money, there is a key difference between the two because of the kind of financial institution that offers each certificate type. Share certificates are exclusively offered by credit unions and certificates of deposit are offered by banks. 

A share certificate builds dividends and a certificate of deposit builds interest. When you invest in a share certificate, you’re buying a share of  the credit union and are paid dividends at the end of the term. However, a certificate of deposit instead allows the bank to pay you interest at the end of the term.

Despite the difference in names, share certificates and certificates of deposit are very similar and offer many of the same benefits. Just like certificates of deposit, share certificates are federally insured accounts with specific  terms to grow your money at a set rate with minimal risk.

Benefits Of A Share Certificate Account 

Whether you want to store some extra savings or earn dividends, opening a share certificate credit union account may be a great option for you. Each credit union offers a variety of benefits and features that come with opening a share certificate account.  

Federally Insured 

A major benefit of getting a share certificate is that your money is federally insured. The National Credit Union Administration insures share certificates up to $250,000 and guarantees your money’s safety.  

Adjustable Rates & Terms 

Share certificate rates depend on where you choose to open a share certificate account. Credit unions often have a set list of rates and terms to give you a variety of options when opening a new account. Arkansas Federal offers tiered rates based on terms as short as three months as well as longer terms over seven years. Your initial investment amount, rate, and term length impacts how much your share certificate will earn.

Fixed Rate Of Return 

One of the major benefits of a share certificate is that they’re predictable and easy to understand unlike other methods of investing, like stocks or mutual funds. When opening your account, you select the rate, terms, and deposit amount to watch your savings grow all while being federally insured. The longer the terms you set, typically higher the rate, and shorter terms normally will lead to earning less dividends overall.

Low Opening Deposit

Just like opening any other type of savings account, you will have to make a deposit to open your share certificate account. Most credit unions offer low opening deposits to make your account easy and affordable. 

Arkansas Federal Share Certificates 

If you are looking to save money and keep it safe through a federally insured account, then a share certificate through Arkansas Federal may be the right choice. There is no one-size-fits-all approach to saving money, so we offer a variety of terms and rates to personalize your money saving experience. 

A few benefits we offer when opening a share certificate account include: 

  • Flexible terms as short as 3 months or as long as 7+ years
  • No monthly service fees 
  • Low minimum deposit to open select accounts, starting at  just $1,000

Still on the fence about opening a share certificate account? Our experienced team is ready to help create a quick and safe way to save money personalized to your needs. Stop by your local branch to learn more about opening an account with Arkansas Federal, or give us a call today at 800.456.3000 for more information.

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