Have you been trying to start a long-term savings fund?
In your quest to find a place to park your savings, you may have considered a share certificate (referred to by banks as “certificates of deposit” or just “CD”). While these products offer attractive dividend rates, the restrictions surrounding them can make you feel hesitant.
For one thing, traditional Share Certificates have locked-in rates. In a rising-rates environment, this can mean losing out on significant growth as rates climb.
Also, if you choose to withdraw your money before a Share Certificate matures, you may get an early withdrawal penalty, which may even include the original funds you used to open it.
Here’s what you need to know about them.
What is a Flex Certificate?
Just like traditional certificates, Flex Certificates offer attractive dividend rates, are federally insured, and have a predetermined maturity date. However, Flex Certificates offer greater flexibility and accessibility.
Are all Flex Certificates alike?
Here are the two types of Flex Certificates that MCCU offers:
1.) Regular Flex Certificates
Our regular Flex Certificates offer you the opportunity to tap into a higher dividend rate, plus you can make additional deposits of $500 or more any time during your Certificate term.
2.) Flex Plus Certificates
When you open a traditional Certificate, you leave the initial deposit to gather dividends until the certificate matures. If you withdraw your funds or close the certificate early, you’ll have to pay a penalty.
With a Flex Plus Certificate, you can make a one-time withdraws of some or all of your funds before it matures without paying a penalty, as long as you leave the minimum balance in the account. This can be convenient if you suddenly need to access your funds in a pinch.
And just like the regular Flex Certificate, you can make additional deposits of at least $500 any time during the Certificate term.
Are there any drawbacks to Flex Certificates?
Many banks have strict qualifications surrounding their Flex CDs, including minimum deposits that can be 10 times higher than those of traditional CDs. Also, interest rates tend to be slightly lower than the rates for traditional CDs.
Here at MCCU though, we offer our members the best of both worlds. You can open a Regular Flex Certificate with as little as $2,500. Our Flex Certificates are tiered – the longer the term you choose, the higher rate you’ll earn.
Find out more about our Flex Certificates today!
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