Share Certificate vs. CD? What’s the Difference?

A man fans money in front of his face as he considers his savings options: get a share certificate, a cd or certificate of deposit, or a high-yield savings account. Decisions, decisions!

CERTIFICATES. You’ve seen the term a lot recently in promos for FFCCU and other financial institutions. At a credit union, you may have heard about ‘share certificates.’ Elsewhere you’ve probably seen mention of ‘certificates of deposit,’ more often abbreviated as ‘CDs. Share certificate vs CD vs certificate of deposit…what’s the difference?

Spoiler Alert: functionally, there really isn’t any difference. All of these are savings accounts set for a fixed duration of time. They cannot be drawn from without penalty but typically offer better dividend returns than a typical savings account. There are, however, some important details about what happens to the money you invest that does make a difference.



Share certificates get their name because deposits made at member-owned, not-for-profit credit unions are your ‘share’ of ownership in the credit union. Any money a credit union earns does not become a profit for an owner or board of investors. Instead, earnings are given back to credit union members in various forms. This can be reduced fees for services, better rates for loans and savings accounts, beneficial promotions, improvements to services like digital banking tools, etc.



Certificates at any financial institution are noteworthy for being a safe way to earn money on savings that you do not need convenient access to. Both share certificates and CDs have fixed rates for their earnings. This “locks in” the amount of money you will make from a particular certificate, regardless of any future changes to interest rates.

Many credit unions insure members’ deposits – either through a private insurer like American Share Insurance (ASI), or a federal body like the National Credit Union Administration (NCUA). CDs at for-profit banks are similarly insured by the Federal Deposit Insurance Corporation (FDIC).



When deciding which is right for you, the real comparison is whether you will be investing your money at a credit union or elsewhere. There are a lot of good reasons to become a member of a credit union, even beyond the great rates offered on share certificates. With no practical difference between share certificates and CDs, it’s up to you!