A term certificate can help you get a greater return on your investment so you can build your savings faster.
As a gig worker, you’ve already got a day job, and another day job, and probably a passion project or two. Make your hard-earned money do some of the work for you with a term certificate on your terms.
What is a term certificate?
A term certificate, otherwise known as a certificate of deposit or a share certificate, is a special type of savings account. With it you agree to leave your money in the account for a specific length of time—a term—usually ranging from six months to five years.
In exchange for this agreement, your bank will give you a better rate of return than you’ll find with a standard savings account. The rates usually increase the longer the term, but you can often find promotional rates so be sure to look closely at the options available.
Once the certificate “matures” you’ll get your initial deposit back plus the interest you earned, giving you the freedom to invest or spend your money as you see fit.
How does a term certificate fit into my savings plan?
Once you’ve built up your emergency fund and have enough in your checking account for your budgetary needs, it’s time to look at building wealth. Term certificates strike an excellent balance between standard savings accounts and riskier investment accounts with their greater rate of return, making them a fantastic choice for building your savings.
Anyone can do this—sometimes with as little as $1,000 to start. Depending on where you’re at in your journey that $1,000 might seem like a lot, but with the rate of return on a term certificate, it’s worth it!
You might use your certificate to:
- Grow your retirement savings.
- Save for a specific goal like a vacation, car, or another big purchase.
- Build a savings “ladder” where you open several certificates with different maturity dates—giving you the opportunity to reinvest or spend more frequently.
This one-time investment allows your savings account to act as an additional side-hustle and build your wealth while you focus on your day-to-day.
Where can I open a term certificate?
Certificates are available at many financial institutions, however First Entertainment Credit Union has a wide range of certificate options designed specifically for creative professionals.
“First Entertainment excels at giving people flexibility and freedom in how they want to manage their finances,” said film editor and director Micah Stewart. “That’s especially important in the entertainment industry where so many people have creative and non-traditional jobs.”
Looking to get started? Apply online or speak to one of our personal bankers today.
