Generally speaking, certificate accounts are among the safest investment options available. Taking advantage of this product can help you make money while doing very little to earn it.
A certificate account is low-risk, and allows you to store away money you won’t use or need immediately. The cash that you will not utilize for months or years is parked in a certificate account for safe keeping. Since your money is parked with one institution, you can earn dividends on the cash. Essentially, the institution pays you for the opportunity to safeguard your cash.
If you leave the money in a certificate account for the entire duration of the term, the institution will pay you a dividend rate that is typically higher than you would earn from the same amount of cash sitting in a checking or basic savings account.
One of the greatest characteristics of a certificate account is that the interest rate is determined ahead of time, meaning you are guaranteed to get back what you put in. On top of getting back what you put in, you also receive the dividends your money accumulated when the certificate account matures.
Certificate accounts can be viewed as timed deposits. The concept is simple. You agree to keep your money in the account for a certain amount of time. This set period of time is called a “term length” and they can vary greatly. A term length can be as short as a few days to as long as a decade. At MAX, certificate accounts are available for terms as short as 30 days or as long as 60 months. The dividend frequency and dividend rate is dependent upon the type of MAX certificate account you elect to invest in.
It can be difficult to simply “forget” about the money you put in your savings account. The temptation to withdraw and spend it can be too much for some. If you need a little assistance staying out of your savings account, a MAX certificate account can help. If the money that makes it into your savings account keeps finding a way right back out, restricting your access to savings funds can help you stick to your savings plan. A MAX certificate account “locks in” your money for terms that range from 90 days to 60 months, meaning you’ll pay a penalty if you withdraw money before that time has passed. The idea of your savings costing you money should motivate you to steer clear of the account.
Investing in a certificate account is great way to grow your money safely without taking the risk of losing what you originally decided to invest. Utilizing a certificate account can play a role in your overall savings plan and earn a solid return on your money. At MAX, your certificate account is insured up to $250,000 by the NCUA.
To learn more about MAX Certificate Accounts, click here.