Certificates | Rogue Credit Union (2024)

FAQs

How do credit union certificates work? ›

A certificate is a type of savings account that allows you to earn dividends on your money while also being insured by the National Credit Union Administration (NCUA). Credit unions offer certificates similar to banks' certificates of deposit (CD).

CD rates are generally higher at credit unions than at banks, on average. Of course, you may find the best CD rates at various institutions, including banks. Other than these differences, most certificates work similarly.

The short answer is yes. Like other bank accounts, CDs are federally insured at financial institutions that are members of a federal deposit insurance agency.

Depending on the bank, a $5,000 CD deposit will make around $25 to $275 in interest after one year.

The best 1-year CDs could earn $2,625 in interest on $50,000. The best 2- to 5-year CDs could earn between $2,250 and $2,375 in interest on $50,000 per year.

Earnings are predictable

Here's an example of the interest you could earn for each CD term listed above with a $15,000 deposit: - 6-month CD at 5.55%: You'd earn $410.63 in interest, making the total value $15,410.63. - 1-year CD at 5.67%: You'd earn $850.50 in interest, making the total value $15,850.50.

Why Trust Us? As of June 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions have high-interest checking accounts: Landmark Credit Union Premium Checking with 7.50% APY and OnPath Credit Union High Yield Checking with 7.00% APY.

Can You Get a 7% CD Account? There was a lot of excitement in August 2023 about a few credit unions offering 7% APYs on certificates. But those rates were offered for a limited time only and are no longer available. However, the nation's best CD rates are still well above 5%, with some pushing toward 6%.

Is it safe to open a CD with a credit union? ›

CDs opened at FDIC-insured banks, or credit unions backed by the NCUA, are guaranteed by the federal government. Should the bank or credit union fail, your savings won't be lost, as long as you're within deposit limits.

It's possible to get a 6% certificate of deposit, but currently, they're only offered by credit unions, not banks. Pros of a 6% CD include locked-in interest rates and a relatively high rate of return.

Experts told us that credit unions do fail, like banks (which are also generally safe), but rarely. And deposits up to $250,000 at federally insured credit unions are guaranteed, just as they are at banks.

The biggest risk to CD accounts is usually an interest-rate risk, as federal rate cuts could lead banks to pay out less to savers. 7 Bank failure is also a risk, though this is a rarity.

Banks and credit unions often charge an early withdrawal penalty for taking funds from a CD ahead of its maturity date. This penalty can be a flat fee or a percentage of the interest earned. In some cases, it could even be all the interest earned, negating your efforts to use a CD for savings.

That said, here's how much you could expect to make by depositing $20,000 into a one-year CD now, broken down by four readily available interest rates (interest compounding annually): At 6.00%: $1,200 (for a total of $21,200 after one year) At 5.75%: $1,150 (for a total of $21,150 after one year)

If a person is seeking a riskless investment with a modest return, CDs are a good bet—you'll earn a higher rate than you would with a checking or savings account, but you'll have to commit your funds for a fixed period.

The National Credit Union Administration, an agency of the United States Government, federally insures most credit unions (including HFS). As such, Share Certificates fall under the National Credit Union Share Insurance Fund and are protected against loss for depositors.