There is less risk because
the rate is guaranteed for the term of
your certificate. But, by choosing a step-up,
if rates increase during the term of your
certificate, you may bump your rate up
one time. Your dividend rate cannot increase
above 1.50% from the original dividend
rate.
You can choose the term of the certificate.
They range from 91 days to 6 years. Regardless
of the term you choose, your funds are
always available for emergencies through
a certificate loan.
Your certificate may be used as collateral on a loan with the loan rate equaling
3% above the certificate rate.
Your dividend earnings compound monthly
and may be transferred to your savings
or checking account upon maturity. There
is a penalty for early withdrawal and fees
may reduce earnings.
You will receive a reminder notice 15
days prior to the maturity date. If you
do not respond to this notice, your certificate
will renew at the current rate for successive
terms equal to your original term.
Your funds are safe—they’re
insured by NCUA to at least $100,000 for combined
savings, checking and certificates.
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