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With everyday costs seemingly always on the rise, it’s becoming more critical to have sound savings strategies in place that work for you. One of the best strategies right now is investing in multiple certificate accounts with varying terms, allowing you ultimate flexibility in managing your money.

Certificate accounts at credit unions operate in the same way as a certificate of deposit account at other financial institutions. Investing your savings in certificates provides a high rate of return, insulated from stock market fluctuations. Certificates also typically have low opening deposit requirements and a wide range of terms — in some instances ranging from three months all the way up to 60 months.

If you’re considering investing in a certificate account, there are a few strategies to keep in mind that can maximize your returns.

Short-Term vs. Long-Term Certificates

Though today’s financial environment may have some uncertainty, utilizing short-term certificates has continued to pay off because their return rates remain high. They also allow you to roll into a new certificate once your term expires but maintain a solid rate.

Focusing most of your investment into a short-term certificate doesn’t mean you should neglect long-term certificates or underestimate how much they can help your savings. At Ascend, we encourage our members to think about their long-term financial goals and continually evaluate opportunities. Long-term certificates can give you stability and lock you into a competitive rate ahead of any major shifts in the market, should they occur.

There’s also a case to be made for having both short-term and long-term certificate accounts open at the same time, a strategy known as a certificate ladder. It’s not the only way you can use certificates, however.

Ladder, Barbell, and Bullet Strategies

There are three popular strategies to consider if you’re opening multiple certificate accounts:

Ladder – The ladder strategy works by spreading investments over several certificates that have varying maturity dates, instead of lumping your entire investment into one certificate. As the certificates mature at regular intervals, you can cash them out or roll them into another certificate and keep building.

For example, we see a lot of our members opting to invest heavily in three-month, six-month, and one-year certificates while allocating a smaller amount to three- or five-year certificates. This allows them to keep their options open while still securing a portion of their funds at today’s competitive rates.

Barbell – The barbell strategy works by putting half of your investment into a short-term certificate and the other half into a long-term certificate, so you have two maturity dates. In today’s economy, the barbell strategy can be a little riskier than the ladder, because you’re placing more money in the more extreme yield areas. If rates shift and long-term certificate rates move higher than short-term certificates, the barbell strategy could make more sense.

Bullet – The bullet strategy, where all of your certificates mature at the same time, can be a good strategy if you know you’ll need a lump sum at a specific time. A good example is if you’re planning to buy a house or pay for college. This can be a riskier strategy because the market is tricky, and if rates don’t move correctly, you could miss out on better earnings.

No matter which strategy you prefer, start by identifying your needs and objectives. If you’re seeking stability and aren’t concerned about chasing the highest rate, locking in a longer-term certificate can be a great choice — especially if you can secure a competitive rate before any major shifts in the market occur.

Get an Expert Opinion

At Ascend, we always recommend speaking with a financial professional to determine what the right certificate strategy is for their unique circumstance. This is where credit unions shine in the financial sector — most offer free financial counseling services to their members to help them understand their options and make the best decision.

Don’t let opportunities to easily grow your money pass you by. If you’re considering investing in a certificate, reach out to your financial institution and start saving.

David Feldhaus is the CFO at Ascend Federal Credit Union. Ascend is federally insured by the NCUA.