You’ll need to meet some basic requirements before you can open a certificate including a minimum opening balance and a commitment to keep your money in the account for a set amount of time. The minimum amount of funds you’ll need to deposit to open a certificate will vary in each financial institution. It also depends upon the term you choose. Some institutions will accept an initial deposit as low as $50 for a certificate. Others, such as a “jumbo” certificate, will require an opening balance of $100,000 or more. In general, the more money you invest in a certificate, the higher rate of interest it will earn. Certificate term lengths also vary among financial institutions, with most offering a choice of certificates that run from three months to five years. Typically, certificates with longer maturity terms will earn a higher rate.

Here are some of the reasons people choose to open a certificate:

• Low risk. With each certificate insured by the National Credit Union Administration up to $250,000, you can rest easy, knowing your money is completely secure.
• Higher dividend rates. Certificates offer all the security of savings accounts with higher yields.
• Locked-in rates. There’s no stressing over fluctuating national interest rates with a certificate. The APY is set when you open the account and is locked in until its maturity date. This means you can calculate exactly how much interest your money will earn over the life of the certificate the day you open it.

While keeping your savings in a certificate can be an excellent option for your money, it is not for everyone. Before you move forward with opening a certificate, be sure you won’t need to access the funds before the certificate’s maturity date. It’s best to have a separate emergency fund set aside to help you through an unexpected expense.