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Share certificates can offer better rates than "share accounts," which correspond with bank savings accounts.
A share certificate can be a good option for earning interest on cash you'll want to use in the future.
A share certificate is a type of savings account with a fixed APY for a fixed period. Credit unions offer share certificates. They're equivalent to certificates of deposit (CDs), which you can get at banks. Think of a share certificate as a credit union CD.
While share certificates are equivalent to CDs, share accounts at a credit union are similar to savings accounts at a bank. Here are some critical differences between share certificates and share accounts:
Higher APYs. Share certificates usually offer a higher APY than share accounts, but a share certificate requires that you keep your money in the account for the entire period you selected.
Fixed APYs. For that period, your share certificate will earn a fixed APY. On the other hand, the APY of a share account can change from time to time, so the rate of earnings (called "dividends") you get can change.
No access to funds. If you withdraw your money from a share certificate before the end of its fixed term, you may have to pay a penalty fee. With a share account, you can add or withdraw funds when you need.
» Want the highest APY? See our list of the best share certificate rates
Cash Management Money Market A savings account is a place where you can store money securely while earning interest. A savings account is a place where you can store money securely while earning interest. Learn MoreSoFi Checking and Savings
SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Min. balance for APY Learn MoreEverBank Performance℠ Savings
Min. balance for APY Learn MoreBarclays Tiered Savings Account
Min. balance for APYThese cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
Learn Moreon Wealthfront's website
Wealthfront Cash Account
Min. balance for APY Learn Moreon Betterment's website
Betterment Cash Reserve – Paid non-client promotion
*Current promotional rate; annual percentage yield (variable) is 4.50% as of 9/20/24, plus a .50% boost available as a special offer with qualifying deposit. Terms apply; if the base APY increases or decreases, you’ll get the .50% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks conducted through clients’ brokerage accounts at Betterment Securities.
Min. balance for APY Learn MoreMarcus by Goldman Sachs High-Yield CD
4.50% APY (annual percentage yield) as of 09/20/2024
Learn MoreCapital One 360 CD
Annual Percentage Yield (APY) is accurate as of 09/17/2024
Federally insured by NCUA
Alliant Credit Union Certificate
Annual Percentage Yield (APY) is accurate as of 09/13/2024
Checking accounts are used for day-to-day cash deposits and withdrawals. Checking accounts are used for day-to-day cash deposits and withdrawals.
Discover® Cashback Debit
Chase Total Checking®
Deposits are FDIC Insured
Chime Checking Account
Monthly fee Money market accounts pay rates similar to savings accounts and have some checking features. Money market accounts pay rates similar to savings accounts and have some checking features.
Discover® Money Market Account
Credit unions use the term "share" because members (that is, depositors) at a credit union are part owners of the institution. Just as stockholders have a share of stock in a company, credit union members have share accounts or share certificates in a credit union. Your earnings from a share certificate are called "dividends," equivalent to "interest" earned from a bank.
In the context of investing, a share certificate is a legal document that proves you own some stock (that is, a share of ownership) of a company. The company issues it to the shareholder; a "share certificate" is synonymous with a "stock certificate" in investing terms.
A share certificate works this way: You choose a term (length of time) to open and deposit money into the account. Sometimes a minimum opening deposit is required.
Once you've deposited funds and the term begins, you cannot add or withdraw any funds until the term has ended (or "matured"). You may have to pay a penalty if you withdraw your money before the certificate term ends.
While your money is kept with the credit union, the credit union will pay you dividends. Dividends may be compounded daily or monthly (learn more about compound earnings ).
When your share certificate matures at the end of the term, you can either roll your certificate funds into another share certificate (using the CD ladder strategy ), transfer your money to a checking or share account, or withdraw your money.
Share certificates from federally insured credit unions are safe and can be a good idea for cash you want to grow but won’t need in the near future. Credit unions can get federal insurance through the National Credit Union Share Insurance Fund (NCUSIF), which is administered by the National Credit Union Administration (NCUA). This federal insurance protects up to $250,000 per person, per credit union, per account ownership category (joint accounts and single owner accounts, for example).
CD vs. share certificate: What’s the difference?Certificates of deposit (CDs) can be found at banks, while share certificates can be found at credit unions. Both are a type of savings account that offers a fixed rate of earnings (called “interest” at a bank and “dividends” at a credit union) for a fixed amount of time.
What is a share certificate?A share certificate is a type of savings account offered by a credit union that earns a fixed rate of dividends (a credit union’s version of interest) for a fixed period of time.
Are share certificates safe?Share certificates from federally insured credit unions are safe and can be a good idea for cash you want to grow but won’t need in the near future. Credit unions can get federal insurance through the National Credit Union Share Insurance Fund (NCUSIF), which is administered by the National Credit Union Administration (NCUA). This federal insurance protects up to $250,000 per person, per credit union, per account ownership category (joint accounts and single owner accounts, for example).
CD vs. share certificate: What’s the difference?Certificates of deposit (CDs) can be found at banks, while share certificates can be found at credit unions. Both are a type of savings account that offers a fixed rate of earnings (called “interest” at a bank and “dividends” at a credit union) for a fixed amount of time.
What is a share certificate?share certificate is a type of savings account
offered by a credit union that earns a fixed rate of dividends (a credit union’s version of interest) for a fixed period of time.
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Ruth Sarreal is a content management specialist at NerdWallet. She has written and edited content on personal finance topics for more than five years. See full bio.
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