EDU CD’s benefit youth

Have you ever wanted to start saving for your child’s future but don’t know where to start?

The options being: a savings account, Educational Certificate or perhaps just having a jar on top of the fridge.

There is no wrong way to save money, however, sometimes there are easier ways to earn more money – especially when those dollars are supporting a child’s future.  

The difference between Educational Certificate (commonly known as Educational CD or EDU CD) and a savings account is that withdrawals can not be made on a CD. Savings accounts are set up to be able to make deposits and withdrawals, monthly. 

Certificates of Deposit are time-bound for the purpose of a higher interest rate on a person’s money compared to a savings account. As for Educational CD’s, money can be deposited continuously over the course of many years but not taken out until the child turns 18 years of age. 

Like all CD’s Union State Bank’s Educational CD is a variable rate certificate that can be opened for as little as $25. Unlike typical CD’s, Educational CD’s can receive multiple deposits throughout the year. Thus, allowing family (grandparents, aunts, uncles, etc.) to make deposits into this CD. 

Deposits can be made up until seven days before its maturity. All Educational CD’s mature on the benefactor’s 18th birthday. Interest is calculated by the daily balance method. It also has a maturity of five years, with the interest compounded and credited quarterly (every three months). 

Once the student reaches 18 years of age the CD can be cashed without penalty. If the CD is to be cashed before the child reaches 18 then penalties will apply for the early withdrawal. 

Union State Bank Assistance Vice President of Operations Kristen Jacobson said, “Education CD’s are beneficial for youth because it’s a good way for parents or guardians to start savings for their child’s future. The benefit to our EDU CD is that once they are 18 years-old they can use those funds however they would like to – whether they decide to go to a 4 year college or trade school or go right into the workforce, there is a benefit for everyone.”