A certificate of deposit offers a predictable and risk-free way to grow money you can afford to be without for a few months. But what if you want to add cash to a certificate account you have already opened? Can you add money to a certificate of deposit on a regular basis? At Wasatch Peaks Credit Union, the answer is yes.
CAN YOU TOP UP A CD WITH EXTRA CASH?
Certificates of deposits (CDs), or certificate accounts, have always been a safe and steady place to lock away extra cash for a few months so it can begin to earn interest. These days, however, CDs offer some serious growth potential. What if you just happen to have a little more cash than you expected and you want to add it to that interest-earning goodness?
Guess what? A Flex Certificate from Wasatch Peaks Credit Union does just that. How? Let’s take a closer look at how CDs work, why our Flex Certificate is different, and how that works to benefit our members.
HOW DOES A CD WORK?
CDs allow you to grow your money with absolute predictability and safety. When you contribute money to a certificate account, it’s locked away for a set period. In the intervening time, your money attracts a fixed rate of interest that is compounded at regular intervals. At maturity, you have the option to cash out your earnings or reinvest if for another go around.
The great thing about CDs is that they work like investments, but they offer all the security of a regular bank account, with deposits guaranteed up to $250,000 by the federal government. Unlike most investments, you’ll also know exactly how much in principal and interest you’ll be receiving at the end of the term. That's certainty you can bank on.
On the downside, once invested, there’s usually no way to add extra cash to a CD. In most cases, you’d need to put this bonus cash into a separate CD with a different maturity date, or at least stash it in a savings or money market account with a significantly lower rate.
HOW DOES A FLEX CERTIFICATE WORK?
Fortunately, some innovative banks and credit unions recognize the appeal of a CD that works more like a regular deposit account, while still keeping a nest egg safely out of reach.
Wasatch Peaks Credit Unions’ Flex Certificates are designed to help you save with a low minimum balance and a competitive annual percentage rate, compounding monthly. You can also add in any extra amount, up to $10,000 per month, you like whenever you have it, up to a maximum of $100,000 per year.
You can open a Flex Certificate account with an initial deposit of just $50 and go from there, contributing additional money whenever you can. And, while most CDs require you to contribute your full deposit for the full term, a Flex Certificate allows you to take out cash during withdrawal windows on the first three business days of January, April, July, and October.
ADVANTAGES OF FLEXIBLE CERTIFICATES
That’s a lot of choice and flexibility for what is normally a take-it-or-leave-it product. Let’s take a closer look at some of the real advantages an “add-in” CD offers.
A truly flexible CD product like a Wasatch Peaks One Year Flex Certificate allows you to add money when you have it. There’s no need to stash money in a savings account or risk spending it in a checking account until you have saved enough to meet a minimum deposit requirement on a new CD.
That can be a great help if you’re just starting to save and looking to put away every penny. With no limit on when or how much you can add to a Flex Certificate, you can put extra dollars safely out of reach so you can make real progress towards your savings goals.
LOW MINIMUM BALANCE
Our Flex Certificate’s low minimum balance also makes it easier to start saving, and to keep your CD balance growing even if you can’t afford to add to your balance for a few months. You can open a Flex Certificate account with as little as $50 and still earn a great rate that beats many products with longer terms or higher minimum balances.
Wasatch Peaks’ Flex Certificates also feature a competitive rate that is compounded monthly, meaning your money grows fast. You’ll see quick results as your balance increases, no matter how small of an amount you start with.
A Flex Certificate also makes it easier to get your money out, if you need it. While the certificate matures after a full year, you can withdraw part or all of your balance on the first three business days of every quarter (Jan., April, July, Oct.) no matter when you opened your account.
At the same time, you’ll earn a fixed interest rate for the full term of your Flex Certificate, so you’ll know from the beginning exactly how much you’ll get out at maturity. However, you will need to recalculate if you add funds or make withdrawals during the quarterly window periods.
All this growth and flexibility comes at no increased risk to you. A Flex Certificate CD enjoys the same level of federal insurance backing as checking, savings, and money market accounts. All Wasatch Peaks CD products are guaranteed by the National Credit Union Administration (NCUA).
POTENTIAL DISADVANTAGES OF FLEXIBLE CDS
That said, the increased choices and options offered by a flexible CD product come with some potential disadvantages.
With a flexible CD product it’s important to be sure you can actually afford to contribute money before you put it in because once money is contributed to a Wasatch Peaks Flex Certificate, you will need to wait until the start of the next quarter to withdraw any money you might need.
MISSED SAVINGS GOALS
If you are working hard to build healthy savings habits, then the ability to withdraw funds from your Flex Certificate at the start of every quarter might not be best for you. If you don’t think you have the discipline to leave your savings alone for long enough to reach your goals, then a less flexible CD product might suit you better.
RELATIVELY SHORT TERM
The 12-month term of the Flex Certificate is relatively short for a CD product, meaning that you can only lock in the going interest rate for a year. If you think that rates are going to fall in the next few months, you might want to try to lock in current rates by buying into our 36-, 48- or even 60-month products.
UNSUITABLE FOR LARGE AMOUNTS
Flexible CDs are great if you want to save but are unsure how much to put aside. If you are looking for a safe place to store a significant amount of cash, you could be better off looking at a more traditional CD product. You might be able to get an even better interest rate while not running up against a maximum funds limit like the Flex Certificate’s $100,000 ceiling.
AIM HIGH WITH WASATCH PEAKS CREDIT UNION
Saving can be hard. It’s tough to know how much to put away and to plan for unforeseen events, while still giving your savings a chance to grow so you can meet your goals. You might be saving for a wedding or a pair of mountain bikes, but either way, you should start saving soon.
A Wasatch Peaks One Year Flex Certificate offers our members the safety and certainty of a traditional CD with the flexibility associated with a money market or savings account—while still offering a great rate to make sure your money grows. Our Flex Certificate features:
- Competitive rate, compounded monthly
- Minimum balance $50
- Deposit up to $10,000 per month
- Up to $100,000 per year
- Withdrawals on the first three business days of each quarter (Jan., April, July, Oct.)
North Utahns like to work hard and play hard. If you’re lucky enough to live, work, worship, or attend school in Weber, Morgan, or Davis counties, you’re eligible to become a Wasatch Peaks Credit Union member. At Wasatch Peaks, we have the financial tools and resources you need to start building for the future while making the most of life in our beautiful backyard.
Talk to us today about which Wasatch Peaks CD is right for your savings needs, or click below to learn more about our innovative “add-in” Flex Certificates.