Frontwave Blog

Safer Investing with Certificates

Looking to grow your savings but don’t want the volatility and risk that comes with the stock market? Certificates (also known as certificates of deposit, or CDs) may be a good option to consider.

A certificate is kind of like a special savings account that offers you higher returns than a regular savings account, as long as you leave your money in there for the specified amount of time. When open a certificate, you commit to a certain term, such as 6 months, 1 year, 2 years or more. In general, the longer the term, the higher the rate of return (also known as the annual percentage yield).

There are 2 keys that make certificates generally safer than investing in the stock market. First, the rate of return is stated when you open the certificate and doesn't vary over the term like returns from the stock market can. Second, when you open a certificate with a federally insured credit union like Frontwave, your deposits are insured up to $250,000.*

Here at Frontwave we offer two kinds of certificates, both with a variety of terms and options.

Share Certificates

To open a Frontwave Share Certificate, you need to deposit a minimum of $1,000. You can choose from flexible terms ranging from 6 months up to 5 years, with each term offering its own dividend rate. Dividends are paid monthly and may be withdrawn at any time, but if you take out your initial investment before the end of the full term, a penalty may apply.

When the full term is up, your certificate will have matured, which means you can withdraw your initial investment without penalty — or choose to automatically renew your certificate at the current dividend rates.

Saver Certificates

Don’t have $1,000 to plunk down all at once? No problem. Check out our Saver Certificates, which allow you to contribute money over time. You can open a Saver Certificate with a deposit of as little as $100 or as much as $500, then contribute $10 to $500 each month for the life of the term. Choose from flexible terms of 6 months, 1 year, 2 year or 3 years. Like Share Certificates, dividends are paid monthly and may be withdrawn at any time, but if you take out your initial investment before the end of the full term, you may have to pay a penalty.

Active-duty or retired military? Ask about our special Military Saver Certificates.

What’s the Catch?

While certificates can help keep you from the whims of the stock market, no investment is completely risk-free. Certificates may be a good bet if you know you won’t need that money right away. But, as noted above, if you need to take out your money before the certificate has fully matured, you may have to pay a penalty. As with any deposit, loan or investment, be sure to carefully read and understand the terms you’re signing up for.

Got questions?

To learn more about our certificate options, give us a buzz at 760.631.8700 or swing by a local branch. If you’re ready to open a certificate today, click here to get started.

*Click here for full details.