Making Money! Saving or Investing?

Your credit union has experts that can advise you on what to do as you go into adulthood and handling some of your own money for your own future. Here are some of the differences between the most popular types of investing or saving so you can make a smart decision. Savings accounts and Share Certificates are the most popular forms of saving and investing, but do you know what the benefits are and how to use them? Here is a little peek into the world of money like you may not have seen before.

Savings Accounts

Simply put, a savings account is a vehicle for you to safely house your money that gains interest over time. There are the traits that most accounts have.

• Limited withdrawals per month
• Interest accrued on the money in the account sometimes varies based on the amount of money in the account
• Option of being accessed via a debit card
• No end date or term limit on the account
• Secured by the NCUA up to $250K
• You have to be at least 18 years old but parents and guardians can open one with you as a custodian

Share Certificates

They are low-risk investments suitable for cash you don’t need for months or years that have a set term or duration.

• One withdrawal at the end of the term, without penalty
• Interest earned varies based on the amount invested and/or term of the Share Certificate, e.g. 3 month or 10 year terms
• Often covered by NCUA
• Typically has a higher annual rate of return
• Dividends earned is taxed just like personal income
• Before 18 you need a custodial account

Take Aways – Both accounts are very low risk ways of earning money, but it may come down to how much access you need to your money, taxes and how much interest you want to gain. You can determine with your credit union expert which might be best for you. It’s never too soon to know your options!