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Balancing Risk and Reward: Incorporating Certificates into Your Portfolio

June 12, 2023 | Modified: June 28, 2023

When it comes to investing, striking the right balance between risk and reward is crucial. While various investment options are available, one often overlooked but potentially valuable addition to your portfolio is a Certificate (commonly referred to as a CD). Our blog will explore what a Certificate is, why Certificate rates are higher than usual, how they offer a safer investment than the stock market, and how incorporating Certificates can align with your personalized financial goals.

Understanding Certificates

A Certificate is a financial product offered by credit unions and banks that allows individuals to deposit a specific amount of money for a fixed period, typically ranging from a few months to several years. In return for depositing your funds, the financial institution pays you a predetermined interest rate, usually higher than a Traditional Savings Account.

Exploring Current Certificate Rates

One of the appealing aspects of Certificates is that they often offer higher interest rates than other savings vehicles. Presently, Certificate rates are higher than usual due to several factors in the economic landscape. One reason is the Federal Reserve’s policy to increase interest rates in response to inflation concerns. As a result, credit unions and banks are offering more attractive rates to incentivize individuals to deposit their funds into Certificates rather than keeping them in lower-yielding Savings Accounts.

Benchmark FCU Announces Certificate Flash Sale 

Benchmark Federal Credit Union is currently advertising a Certificate Flash Sale featuring a 4.50% APY* on 18-36 month*** certificates. The offer is available to Benchmark FCU members** for a limited time only. Not a member of Benchmark FCU, tap to learn about eligibility to join.

The Safety of Certificate Investments

When it comes to investing, safety is a critical consideration for many individuals. Certificates are often considered a safer investment option than stocks or other high-risk assets. This safety stems from the fact that Certificates are typically insured by the National Credit Union Administration (NCUA) or Federal Deposit Insurance Corporation (FDIC) up to certain limits, which provides a level of protection against the failure of the issuing institution. Certificates are an appealing choice for investors seeking stability and peace of mind.

Aligning Your Personalized Financial Goals

Every investor has unique financial goals, and incorporating Certificates into your portfolio can align with various objectives. Here are a few examples:

  1. Capital Preservation – Certificates can be an excellent choice if your primary goal is to protect your capital and preserve wealth. Investing in Certificates gives you a predetermined interest rate and maturity date, allowing you to plan your finances accordingly.
  2. Income Generation – Certificates can also be utilized to generate a steady income stream. By selecting Certificates with staggered maturity dates, you can create a “Certificate ladder” that provides regular interest payments over time, helping to supplement your income or meet specific financial obligations.
  3. Diversification – Diversifying your investment portfolio is a prudent strategy to manage risk. By incorporating Certificates alongside other asset classes like stocks and bonds, you can spread your risk and potentially reduce the impact of market volatility on your overall returns.
  4. Short-Term Savings Goals – Certificates can be an effective tool if you have specific short-term financial goals, such as saving for a down payment on a house or a dream vacation. With various maturity options available, you can align your savings goals with the appropriate Certificate term to ensure your funds are readily available when needed.

Balance Risk by Incorporating  Certificates into Your Portfolio

Balancing risk and reward is essential for any investor, and incorporating Certificates into your portfolio can be a valuable strategy. With higher rates currently available and their reputation for safety, Certificates offer an attractive option for those seeking stability and a predictable return on their investment. By aligning your personalized financial goals with the benefits Certificates provide, you can create a diversified portfolio that suits your needs and helps you achieve your long-term aspirations. Tap to take advantage of Benchmark FCUs Certificate Flash Sale rate.

Remember to consult with a financial advisor to assess your individual circumstances and determine the best approach to incorporate Certificates into your investment strategy.


*APY = Annual Percentage Yield.  Yield is subject to change at Credit Union’s discretion without prior notice.  Early withdrawal penalties may apply.

**If not already a member, must become a Benchmark FCU Member by opening an Ultimate Membership Account to receive special Certificate rates.

***Available terms are 18, 24, 30, & 36 months.

**** Not financial advice.

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