Getting the most out of your savings can be a challenge. 

You want to have access to your hard-earned funds when life throws you an unexpected expense, but you also don’t want to see a large sum just sitting in a savings account and earning a small amount in dividends.

How do you make your money work harder for you? Enter the magic of share certificate laddering.

• What’s a Share Certificate?
  Share certificates, also known as certificates of deposit, are like a savings account where you can’t withdraw the money for a certain period of time. In return for agreeing to keep your money in a share certificate for a longer period of time, your financial institution pays you a higher rate of return.
   
• What’s a Share Certificate ladder?
  Share Certificate laddering is a simple concept: Divide the amount of money you have to save among certificates that mature at different intervals. As each certificate matures you can turn it over into a longer maturity certificate. In time, all your certificates will be earning a higher yield with a longer maturity. Because you have a share certificate maturing regularly, you can always cash it in if you need the money.
   
• A beginner’s Share Certificate ladder
  A common share certificate ladder would be as follows: If you have $20,000 to invest, deposit $10,000 into a one- and two-year certificate. Each year when a certificate matures roll the principle ($10,000) plus the dividends (interest made over the year, which varies depending on the interest rate) into another certificate for a higher-dividend yield than a savings account. Continue each year as your certificates mature, and reinvest them into higher-yield certificate options or specials so all your money is earning more.
  
  If you're starting with less, you could invest smaller amounts into three, six, 12, or 24-month certificates that have lower minimum balances ($1,000) to open. Again, the same principle applies, as each certificate matures reinvest it for a longer-term certificate until all your money is earning the highest rate.

Depending on your financial goals you can ladder any way you want. For help starting your share certificate laddering, contact UnitedOne Credit Union today. You can book an appointment online to see a Member Service Representative or call us at 920-684-0361 in Manitowoc or 920-451-8222 in Sheboygan.

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