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What Is a Share Certificate and Why You May Want to Start One


If you're fortunate enough to have some extra money that you'd like to save but you want to earn more than from a regular savings account or money market account, then you may want to consider opening a Share Certificate. A Share Certificate is like a certificate of deposit (CD). The difference is that a Credit Union issues a Share Certificate, whereas a bank issues a CD. How Does a Share Certificate Work? With a Share Certificate, you deposit a sum of money for a term (predetermined length of time) that you select. Your balance amount and term can affect the dividend rate. Generally, larger balances and longer terms will offer higher dividend rates. Nikkei and Mabuhay offer Share Certificates for balances starting at $1,000 and with terms ranging from 6 months to 36 months.

How is a Share Certificate Different Than Investing in Stock? Unlike stocks, which fluctuate in value, a Share Certificate pays a fixed rate on a fixed term. Therefore, Share Certificates are a lower-risk investment. However, it's also important to note that if you've purchased stock under your name, you can sell it whenever you want. With a Share Certificate, you may withdraw your money before the end of the term with an early withdrawal penalty. However, at Nikkei and Mabuhay, we have Share Certificates terms as short as six months.

Are Share Certificates Safe? Share Certificates are federally insured by the National Credit Union Administration (NCUA), making them a safe and secure investment. Share Certificate Terminology:

  • Principal: The amount of money you deposit into the account

  • Term: The length of time the principal is required to stay in the account

  • Dividend: The sum of money earned from interest (dividend rate)

  • Date of Maturity: The date that you're allowed to withdraw your money without penalty, which includes your principal and earned dividends

To learn more or to start a Share Certificate, contact a Member Service Representative at 866.4NIKKEI (866.464.5534) or 888.MABUHAY (888.622.8429).