If you want to stash your money away for a year to earn interest, consider a credit union. Right now, some credit unions are offering competitive rates on share certificates -- their version of a certificate of deposit. You can find one-year share certificates with annual percentage yields, or APYs, on par with one-year CDs at online-only banks -- with some inching close to 5%.
One-year share certificates work just like a CD. You’ll still deposit a lump sum of money for a year to accrue interest. And if you withdraw the money before the term ends, you’ll still be on the hook for an early withdrawal penalty.
What is a 1-year share certificate?
A one-year share certificate is a savings vehicle at a credit union that offers a fixed interest rate on your money in exchange for leaving it in the account for a year. In most cases, if you withdraw money before the CD matures, the credit union will likely impose an early withdrawal fee. Most credit unions charge 30 to 90 days of interest for a one-year term.
Like bank CDs, a share certificate may be set to renew automatically. That means when your term ends, you’ll have seven to 10 days before the credit union renews the term with your current balance and a new APY. Or you can withdraw the money or modify the certificate during this grace period.
Best 1-year share certificate rates
| Bank | APY | Min. deposit to open | Term |
|---|---|---|---|
| City Credit Union | 5.00% | $1,000 | 1-year |
| Credit Human | 5.00% | $500 | 1-year |
| Freedom Credit Union | 5.37% | $500 | 1-year |
| Connexus Credit Union | 4.76% | $5,000 | 1-year |
| America First Credit Union | 5.15% | $500 | 1-year |
| Alliant Credit Union | 5.40% | $1,000 | 1-year |
| PenFed Credit Union | 4.80% | $1,000 | 1-year |
More details on the best 1-year share certificate rates
City Credit Union
- APY APY = Annual Percentage Yield.
- 5.00%
- Min. deposit to open
- $1,000
- Term
- 1-year
City Credit Union offers share certificate terms ranging from six months to five years. A $1,000 minimum deposit is required, and dividends are paid monthly.
Keep in mind that the early withdrawal penalty is 90 days of interest for one-year certificates. When your certificate matures, you’ll have 10 days to withdraw the funds or renew the certificate at the current rate before it automatically renews.
Lastly, membership is limited to select Texas residents. You can find the full list of eligible counties on City Credit Union’s website.
City Credit Union offers share certificate terms ranging from six months to five years. A $1,000 minimum deposit is required, and dividends are paid monthly.
Keep in mind that the early withdrawal penalty is 90 days of interest for one-year certificates. When your certificate matures, you’ll have 10 days to withdraw the funds or renew the certificate at the current rate before it automatically renews.
Lastly, membership is limited to select Texas residents. You can find the full list of eligible counties on City Credit Union’s website.
Credit Human
- APY APY = Annual Percentage Yield.
- 5.00%
- Min. deposit to open
- $500
- Term
- 1-year
Credit Human has share certificate terms ranging from six months to 10 years. A $500 minimum deposit is required. Dividends for your share certificate are paid monthly. And there is an early withdrawal penalty, but it’s not clearly stated.
You can apply for an account online or by calling the Membership Service Center at 210-258-1234 or toll-free at 800-688-7228. However, you must meet Credit Human’s eligibility requirements to open an account.
Credit Human has share certificate terms ranging from six months to 10 years. A $500 minimum deposit is required. Dividends for your share certificate are paid monthly. And there is an early withdrawal penalty, but it’s not clearly stated.
You can apply for an account online or by calling the Membership Service Center at 210-258-1234 or toll-free at 800-688-7228. However, you must meet Credit Human’s eligibility requirements to open an account.
Freedom Credit Union
- APY APY = Annual Percentage Yield.
- 5.37%
- Min. deposit to open
- $500
- Term
- 1-year
Freedom Credit Union’s share certificate terms range from six months to five years. A $500 minimum deposit is required unless you’re 25 or younger -- then, it’s $250. Freedom Credit Union notes that there may be fees for early withdrawals, but it doesn’t clearly state how much.
When you’re ready to open an account, you’ll need to meet the credit union’s membership requirements. You can become a member by opening a savings account with a minimum $5 balance, and you can open an account online.
Freedom Credit Union’s share certificate terms range from six months to five years. A $500 minimum deposit is required unless you’re 25 or younger -- then, it’s $250. Freedom Credit Union notes that there may be fees for early withdrawals, but it doesn’t clearly state how much.
When you’re ready to open an account, you’ll need to meet the credit union’s membership requirements. You can become a member by opening a savings account with a minimum $5 balance, and you can open an account online.
Connexus Credit Union
- APY APY = Annual Percentage Yield.
- 4.76%
- Min. deposit to open
- $5,000
- Term
- 1-year
Connexus offers one-, two-, three-, four- and five-year share certificates plus a promotional 17-month share certificate. A $5,000 minimum deposit is required to open an account. If you withdraw from the account before the certificate matures, you’ll pay 90 days in dividends. Connexus also has a calculator to help determine what your estimated return would be.
Membership eligibility is much easier than other credit unions, but it’s best to double-check eligibility requirements.
Connexus offers one-, two-, three-, four- and five-year share certificates plus a promotional 17-month share certificate. A $5,000 minimum deposit is required to open an account. If you withdraw from the account before the certificate matures, you’ll pay 90 days in dividends. Connexus also has a calculator to help determine what your estimated return would be.
Membership eligibility is much easier than other credit unions, but it’s best to double-check eligibility requirements.
America First Credit Union
- APY APY = Annual Percentage Yield.
- 5.15%
- Min. deposit to open
- $500
- Term
- 1-year
America First offers share certificate terms ranging from three months to five years. There’s a minimum $500 deposit requirement to open an account. Unlike most financial institutions, this credit union doesn’t charge an early withdrawal fee on its two types of certificate accounts -- standard and bump-up.
You can open an account at one of the credit union’s physical branches or online. Membership is available to residents of certain states in the southwestern US. Check America First’s membership requirements to see if you’re eligible.
America First offers share certificate terms ranging from three months to five years. There’s a minimum $500 deposit requirement to open an account. Unlike most financial institutions, this credit union doesn’t charge an early withdrawal fee on its two types of certificate accounts -- standard and bump-up.
You can open an account at one of the credit union’s physical branches or online. Membership is available to residents of certain states in the southwestern US. Check America First’s membership requirements to see if you’re eligible.
Alliant Credit Union
- APY APY = Annual Percentage Yield.
- 5.40%
- Min. deposit to open
- $1,000
- Term
- 1-year
Alliant offers high-yield share certificates and jumbo share certificates. Terms range from three months to five years. IRA certificates are also available. Alliant requires a $1,000 minimum deposit for standard certificates and $75,000 for jumbo certificates. Unlike other banks and credit unions, it compounds and pays interest monthly, so you won’t earn as much as banks that compound interest daily. There’s a penalty of up to 90 days of dividends if you withdraw from your CD early.
You’ll need to meet certain eligibility requirements to open an account, but membership is available nationwide. You can open an account online or by calling 800-328-1935.
Alliant offers high-yield share certificates and jumbo share certificates. Terms range from three months to five years. IRA certificates are also available. Alliant requires a $1,000 minimum deposit for standard certificates and $75,000 for jumbo certificates. Unlike other banks and credit unions, it compounds and pays interest monthly, so you won’t earn as much as banks that compound interest daily. There’s a penalty of up to 90 days of dividends if you withdraw from your CD early.
You’ll need to meet certain eligibility requirements to open an account, but membership is available nationwide. You can open an account online or by calling 800-328-1935.
PenFed Credit Union
- APY APY = Annual Percentage Yield.
- 4.80%
- Min. deposit to open
- $1,000
- Term
- 1-year
Pentagon Federal Credit Union, also known as PenFed, offers money market certificates that are just like share certificates. Terms range from six months to seven years, and there’s a minimum $1,000 deposit. However, PenFed has a steep early withdrawal penalty. You can lose up to a year of interest if you withdraw money from your one-year certificate before the term ends.
You can open an account online or at one of its physical branch locations, but you’ll need to open a PenFed savings account to become a member first.
Pentagon Federal Credit Union, also known as PenFed, offers money market certificates that are just like share certificates. Terms range from six months to seven years, and there’s a minimum $1,000 deposit. However, PenFed has a steep early withdrawal penalty. You can lose up to a year of interest if you withdraw money from your one-year certificate before the term ends.
You can open an account online or at one of its physical branch locations, but you’ll need to open a PenFed savings account to become a member first.
Alternatives to a 1-year share certificate
If you’re on the fence about locking your money away for a year, your credit union may offer other flexible options, such as a high-yield savings account or money market account. Both accounts let you withdraw and deposit money more frequently than the one-time deposit share certificates require.
Keep in mind that most money market accounts require a higher minimum balance to earn interest. And even though you’ll get a debit card, you may be limited to a certain number of transactions per month. On the other hand, a high-yield savings account also may limit your withdrawals under Regulation D if your bank still upholds this rule.
High-yield savings and money market accounts also have a variable interest rate, so there’s a chance your APY will increase if rates go higher. But experts don’t believe rates will go much higher, so APYs for these accounts will likely fall, decreasing your earnings.
How to open a 1-year share certificate
Once you’ve narrowed down where you want to open your share certificate, here’s what you can expect.
- Check your eligibility. Make sure you meet membership requirements for the credit union before starting your application. You can check its website or contact customer service to find out.
- Complete your application. You can do this in person or at the credit union’s physical branch. You’ll need to provide personal information, including your Social Security number or Individual Taxpayer Identification Number. You may also need your physical address and phone number. Keep in mind that your application may take a few days to process.
- Fund the account. When your application is approved, you’ll make a one-time deposit to the account. Most credit unions let you transfer funds from an external bank account, while others may let you deposit a check.
- Activate your online account. If the credit union has an app or website portal, consider creating an online account to manage your money digitally.
Factors to consider before opening a share certificate at a credit union
Before you set money aside in a share certificate, here are a few factors to help determine if it’s the right account for your financial goals.
Most credit unions offer share certificates with fixed terms from three months to five years. These terms have strict maturity dates. If you take the money out before the term ends, you’ll pay an early withdrawal penalty that can eat away at your initial deposit and interest earned. Some credit unions also have a minimum deposit requirement that may be more than the money you have set aside.
You’ll also need to make sure you meet membership requirements before starting a share certificate application. Some credit unions limit membership to specific counties or organizations. Others only require you to open a savings or checking account to qualify.
FAQs
A share certificate is just like a CD in that it’s a deposit account with low risk in which your money grows at a fixed rate for a specified period. The difference is that share certificates are offered by credit unions, while most CDs are offered by banks. Earnings on share certificates are referred to as dividends.
Credit unions are not-for-profit, which means profits are distributed as dividends among its members or shareholders. Dividends are synonymous with yields for CDs.
Fees vary depending on the credit union. While some don’t clearly state fees, others specify that there are charges for closing accounts or withdrawing money before a certain time. Early withdrawal fees are generally based on a percentage of the interest earned.
One-year share certificates purchased from a credit union insured by the National Credit Union Administration, or NCUA, are protected for up to $250,000 per person, per account type. Any distributions are also covered by the NCUA. If your credit union is an NCUA member, you won’t have to worry about losing your principal balance if the credit union fails.
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Methodology
CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD and share certificate rates from credit unions and financial companies. We selected the share certificates with the highest APY for one-year terms from among the credit unions we surveyed.
Credit unions we reviewed
America First Credit Union, Connexus Credit Union, First Tech Federal Credit Union, Lake Michigan Credit Union, Navy Federal Credit Union, SchoolsFirst Federal Credit Union, Pentagon Federal Credit Union, Bethpage Federal Credit Union, Delta Community Credit Union, City Credit Union, Credit Human, Farmers Insurance Credit Union, Apple Federal Credit Union, Jovia Federal Credit Union, Freedom Credit Union, Members First Credit Union and Department of Commerce Federal Credit Union.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
