Business Savings Certificates

A credit union business certificate is a savings account that lets you earn a guaranteed return on your deposits. You agree to leave a set amount of money with the credit union for a specific period of time, known as the term, and in exchange, you earn a fixed dividend rate that’s typically higher than what you’d get with a standard savings account.

If you’re not familiar with the basics, a share certificate works similarly to a certificate of deposit (CD), but it’s offered through a credit union rather than a bank.

Here are some of the standout features of credit union business certificates:

• Guaranteed dividend rates: Your rate is locked in for the full term, so your returns are predictable
• Flexible terms: Most credit unions offer terms ranging from a few months to several years
• Federal insurance: Aggregate deposits are insured up to $250,000 by the NCUA
• Higher earning potential: Credit union business certificates generally offer better rates than a regular business savings or money market account

You deposit a lump sum into the certificate, and it earns dividends at a fixed rate for the length of the term you select. Once the term ends, also called maturity, you can withdraw your funds, roll them into a new certificate or move them into another account.

To estimate your potential returns before committing, try using a share certificate calculator to compare different terms and deposit amounts.

Opening a business certificate is a fairly simple process. You’ll need to provide documentation that verifies your business identity and ownership. Most credit unions require your business formation documents, such as articles of incorporation or an LLC operating agreement, your EIN and a valid government-issued ID for each authorized signer.

Federal law also requires credit unions to collect and verify identifying information, like names, addresses and dates of birth, for all individuals associated with the account. This is a standard anti-fraud measure to ensure security for your account and the credit union.

At California Credit Union, you can visit a branch or contact us directly to open a business certificate.

Not all business certificates are the same. Many credit unions offer tiered options based on deposit amount. At California Credit Union, you can choose from these types:

• Traditional certificates: These have the lowest minimum deposit requirement, starting at $1,000, and are a great option for businesses that want to grow savings without committing a large sum
• Mini-Jumbo certificates: These require a higher minimum deposit and typically come with better dividend rates than traditional certificates
• Jumbo certificates: Designed for businesses with larger balances, Jumbo certificates offer the highest dividend rates of the three options

Terms typically range from three months to five years, so you can choose a timeline that fits your cash flow needs. Dividend rates offered by the credit union are determined by market conditions and economic outlooks. Some credit unions will provide incentives through higher dividends for larger deposit amounts. 

Yes. If you withdraw your principal before the certificate reaches maturity, you will typically face an early withdrawal penalty. However, most credit unions allow penalty-free dividend withdrawals, meaning you can access your earned dividends without being penalized.

Credit union business certificates are federally insured by the National Credit Union Administration (NCUA) for up to $250,000 per depositor, per institution. Your deposits are protected even if the credit union were to fail. This is the same level of coverage the FDIC provides for bank accounts, which is one reason many business owners weigh the bank vs. credit union decision carefully.

A fixed-rate certificate locks in your dividend rate for the entire term. No matter what happens in the broader market, your rate stays the same from the day you open the account until it matures. This makes fixed-rate certificates a good fit for businesses that want certainty in their returns.

A variable rate certificate has a rate that can change during the term based on market conditions. If rates go up, your earnings increase, but if they drop, so do your dividends. Variable-rate certificates can work well when rates are trending upward, but they come with more unpredictability.

For most businesses looking for a reliable way to grow savings, fixed-rate credit union business certificates tend to be the more popular choice. California Credit Union offers an Accelerated Business Certificate for a one-time Dividend rate increase to benefit business members in an increasing rate environment. This is just one more benefit of being a member of a credit union.