Share Certificate Vs. CD (Certificate of Deposit)
You may have heard these two terms used interchangeably, but do you know the differences between them? Are they the same thing? Is one better than the other? Here’s everything you need to know when shopping around for a term savings account.
Both Share Certificates and CDs are a type of savings accounts with a set term and withdrawal restrictions. Typically, the longer your term commitment, the higher the dividend you’ll earn. If you have money sitting in a regular savings account (or under your mattress) that you won’t need for while, you can set that money in a Share Certificate or CD for a set term and receive a higher interest rate. Plus, your funds are insured! More on that later.
How are they similar?
- Both offer a variety of term options, depending on your financial timeline
- Both are a longer term solution to earning more for your money
- Both offer guaranteed returns
- Both are insured
How are they different?
While these two types of accounts are widely similar, their difference is that Share Certificates are offered by credit unions and CDs are offered by banks. Because credit unions are not-for-profit, their profits are returned to their members/shareholders in the form of dividends (which are usually higher than banks because of their profit-sharing model).
|Offered by credit unions
|Offered by banks
|Pay in dividends
|Pay in interest
|Insured by NCUA or private insurance
|Insured by FDIC
How Are These Accounts Insured?
Both accounts are insured at their respective financial institutions. Credit unions are either federally insured by the National Credit Union Administration (NCUA) up to $250,000 per depositor, or privately insured. SafeAmerica Credit Union is privately insured through American Share Insurance (ASI) up to $500,000 per account.
Banks are federally insured by FDIC up to $250,000 per depositor.
Let Your Money Work For You!
As a member of SafeAmerica Credit Union, you can take advantage of our competitive rates on all our share certificates, including our rate specials. Click below to view all of today’s rates and starting earning more today!