When it comes to saving your hard-earned money, you have options. One is a certificate, which you can open through a credit union to grow your money for a set term. Term lengths may differ from a few months to a few years. A longer term gives you more time with a great rate but may not be ideal for some savers. Below are a few reasons a shorter term, such as three months, may be more in line with your needs.
Maximize short-term gains with a certificate
1. Spend less time without your funds
There’s an early withdrawal penalty for taking funds out of a certificate before the term ends. It’s important to choose a term length that’s realistic for you. If going years without access to your funds isn’t doable, opt for a shorter term. For example, something like a three-month certificate! In 90 days, you can withdraw the funds plus any earned interest if you need it, or choose to open another certificate.
2. Take a hands-off approach
Due to the nature of certificates and the fact you can’t withdrawal the funds before the term ends, they are a fantastic option if you have a hard time keeping your hands off savings. For example, maybe you’re still working to improve your spending habits. Opening a certificate will help you develop more responsible saving habits over time.
3. Enjoy reliable returns
Just because the certificate term is shorter doesn’t mean you won’t earn more on your balance than you would with a traditional savings account. You’ll still enjoy a fixed interest rate and a predictable return on your money. While certificates are not a true investment in the same way stocks or cryptocurrencies are, they are great for anyone who wants a guaranteed return without the uncertainty of the markets.