Take Advantage of Our Excellent Rates

Summer is here and so are great rates on Share Certificates!

Now is a perfect time to take out multiple certificates to accumulate savings in a safe environment. Other great benefits include:

  • Maintain access to your savings
  • The rate of your certificate is locked in
  • Potential to earn more with a long-term rate than reinvesting at a short-term rate

 

 

Certificate Types

When building your certificate portfolio, the type of certificate you choose matters.  Know your options. Certificate ladders can contain several types of certificates from simple to rate-jumping. Understanding how each can benefit you will assist in creating your strategy.

Certificates,
eCertificates, &
Jump-Up Certificates
  • Certificates offer a secure way to invest for a specified term and achieve higher earnings than in a savings account.
  • eCertificates can be opened online and provide a secure way to invest for a specified term.
  • With Jump-Up Certificates, if the rate goes up, you can go with it! Jump up to a higher rate once during the certificate’s term.
IRA Certificates
  • An IRA Certificate is an easy way to accumulate funds for retirement. Depending on the type you select, you might be able to save on taxes now, or possibly benefit from tax-free earnings in retirement.

Classic Ladder

A “classic” ladder involves buying several certificates that mature at different times, rather than a single long-term one. With this ladder, you can benefit from higher rates while retaining your flexibility.

To build a classic ladder like the example below, first, open four shorter-term certificates and a long-term certificate. Then, reinvest the proceeds from the shorter-term certificates each year into a long-term certificate to extend the ladder. In five years, you will have all long-term certificates with one maturing each year. It’s that simple!

A $10,000 classic ladder might look like this.Graphic that shows a classic certificate ladder

  • $2,000 in a 12-month certificate
  • $2,000 in a 24-month certificate
  • $2,000 in a 36-month certificate
  • $2,000 in a 48-month certificate
  • $2,000 in a 60-month certificate

 

 

Tree Ladder

A “tree” certificate ladder involves buying varying amounts of certificates with different maturity dates. With a tree ladder, you can benefit from a constant liquid cash stream while waiting for the lump sum to mature.

This is a smart option if you will benefit  most from having a large sum in a high-rate, long-term certificate, but do not want to tie up all your savings for that long. A high yield money market (HYMM) account can serve as the catchall account for the transfer of external funds, dividends, and cashed-out certificates.

To build a tree ladder, as shown below, open four shorter-term certificates, a long-term certificate, and a HYMM. Each should contain enough savings to last until the next certificate matures. You have two choices when it matures: deposit it into the HYMM or allow it to roll over. Either option creates a liquid source of funds that can be used without the risk of incurring a withdrawal penalty on the funds in the long-term certificate. In five years, you will have access to the long-term certificate and can set up another tree ladder.

A $10,000 tree ladder might be spread out like this.Graphic showing a tree ladder, certificates

 

  • $500 in a 6-month certificate
  • $500 in a 12-month certificate
  • $1,000 in an 18-month certificate
  • $1,000 in a 24-month certificate
  • $7,000 in a 60-month certificate

 

 

 

Target Date Ladder

If you do not have a large initial investment, a “target date” ladder might be for you. This ladder involves buying several certificates that start at different times, but mature at the same time: the target date. This strategy works best when saving for a large purchase, such as a car or house, where you will need a large sum at once.

With this ladder, you  purchase a long-term certificate first, and then two years later purchase a shorter-term certificate with a maturity date that matches the original. Purchase another certificate 18 months later, etc. to complete the ladder. All certificates will mature at the same time.

When a target date ladder matures, you can maximize your gains one of three ways:

  1. Roll them together into one certificate
  2. Add the proceeds to another certificate during its grace period
  3. Put the cash into a high-yield money market account to make your purchase

 

A $10,000 target date ladder might be spread out like this.Graphic showing a target date ladder example

  • $3,000 in a 60-month certificate
  • $2,350 in a 36-month certificate
  • $1,900 in an 18-month certificate
  • $1,750 in a 12-month certificate
  • $1,000 in a 6-month certificate

 

 

Annual Percentage Yield(s) accurate as of 07/24/17. Subject to approval. Certain restrictions may apply. Fees may reduce earnings on these account(s). Minimum deposit of $1,000 to open account(s). Early withdrawal penalties may apply. Tiered balances earn tiered rates. Federally insured by NCUA. ¹$250,000 and up earns 0.90% APY; $75,000-$249,999.99 earns 0.85% APY; $25,000.00-$74,999.99 earns 0.80% APY; $10,000.00-$24,999.99 earns 0.75% APY; $1,000.00-$9,999.99 earns 0.70% APY. ²$250,000 and up earns 1.10% APY; $75,000-$249,999.99 earns 1.05% APY; $25,000.00-$74,999.99 earns 1.00% APY; $10,000.00-$24,999.99 earns 0.95% APY; $1,000.00-$9,999.99 earns 0.90% APY. ³$250,000 and up earns 1.30% APY; $75,000-$249,999.99 earns 1.25% APY; $25,000.00-$74,999.99 earns 1.20% APY; $10,000.00-$24,999.99 earns 1.15% APY; $1,000.00-$9,999.99 earns 1.10% APY. 4) $250,000 and up earns 0.80% APY; $75,000-$249,999.99 earns 0.75% APY; $25,000.00-$74,999.99 earns 0.70% APY; $10,000.00-$24,999.99 earns 0.65% APY; $1,000.00-$9,999.99 earns 0.60% APY.