Running a business or nonprofit means always being on the lookout for smart ways to save money while keeping risks low. One often-overlooked option that can offer both safety and a solid return is a business term-share certificate (the credit union version of a bank CD).
Whether you’re managing surplus funds or planning for future growth, certificates can be a tool to help you reach your financial objectives.
Learn what to consider and how to leverage business certificates as you try to maximize your savings.
How business certificates work
Term-share certificates are fixed-term investments that require you to deposit a lump sum of money for a set period, typically six to 60 months.
In return, you receive a guaranteed dividend rate that’s usually higher than what you would earn with a regular savings account.
At the end of the term, you receive back your initial deposit plus the accumulated dividends.
See our business certificates >
Benefits of saving with certificates
Whether you’re running a business or nonprofit, generating a reliable income stream is essential to funding products, programs or services. And knowing exactly how much you’ll earn with some of your savings can help you allocate resources more effectively.
Here are some other benefits worth considering:
Higher dividend rates
One of the primary advantages is the offer of higher dividend rates compared to regular savings accounts. If you’re trying to grow your savings, these higher rates can help give you a higher return on investment.
See today’s certificate rates >
Manage lumpy cash flow
Depending on your business or nonprofit, your income (and expenses) can fluctuate at times. Maybe you:
When boosts like this occur, it’s helpful to have an investment strategy to make the best use of the funds.
A six-month certificate could help you earn dividends on surplus funds without locking them away for too long—ensuring liquidity if you need to, for example, restock inventory. If you have a longer savings window, you could explore a longer-term certificate.
Predictable returns
Business certificates (or business CDs) offer predictable returns, which is crucial for financial planning.
Unlike stocks or mutual funds, where returns can fluctuate based on market conditions, the dividend rate on a certificate is fixed for the term. That means you know exactly how much money you’ll earn at the end of the term!
This can allow for more accurate budgeting and financial forecasting with those funds.
Lower risk
If your organization prioritizes capital preservation, business certificates can be an attractive option.
The National Credit Union Administration insures each certificate up to $250,000, providing a safety net for your investment.
It’s another perk of being a credit union member!
Ability to ladder your investments
Laddering involves investing in multiple certificates with staggered maturity dates. This balances the need for liquidity with the desire for higher returns, as it ensures regular access to funds while benefiting from long-term interest rates.
Here’s how it works:
Flexible terms
Certificates come in a variety of term lengths, ranging from a few months to several years. This flexibility allows businesses and nonprofits to align these investments with both financial goals and liquidity needs.
Explore business certificate terms >
Financial stability
During times of economic uncertainty, having a portion of your assets in low-risk investments can provide financial stability and peace of mind.
Business certificates offer protection from market volatility. This stability can be especially valuable for small- and medium-sized businesses.
Preservation of donor funds
Nonprofits have a responsibility to manage donor funds or grants prudently. Investing some of your funds in term-share certificates could help demonstrate a commitment to preserving and growing these funds while minimizing risk.
