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Investing for gains, without the pains

Posted 12:01 a.m. Wednesday

This article was written for our sponsor, Coastal Federal Credit Union.

There comes a time in life when the ongoing stock market gyrations become less exhilarating and more angst-ridden for a lot of investors. That's because the closer people get to retirement, the less they want their investments riding a rollercoaster that may go down at exactly the wrong time.

So where do you find safe harbor for your investments? Two options to consider are Certificate Accounts and Money Market Accounts.

"Either of these investments is a strategic part of a balanced portfolio," said MaryAnne Gangoy, VP of Retail Sales and Service at Coastal Federal Credit Union. "They represent savings you can count on. While the margins won't be as large as with riskier investment, you'll know what to expect. That, and you'll be able to sleep at night."

With Certificates, you set it and forget it

A Certificate is a dividend-bearing term deposit. They are no-risk, high-yielding and federally insured investments.

Most Certificates have specific, fixed terms. These can vary markedly, depending on how long the investor wants his or her money in safekeeping. Terms can be as short as a few months, or span years.

As a general rule of thumb, the longer the financial institution holds on to your money, the higher the rate they pay. When the certificate "matures" or hits the end of the fixed term, the investor can withdraw the funds and all the accrued interest.

Most financial institutions will offer a variety of terms and require different minimum investment amounts. It's really up to the investor to decide what they're saving for and how long to tie up that money.

"Coastal currently offers a 55-month Certificate account that pays 2 percent APY*," Gangoy explained. "But we also have terms ranging from 6 months to 5 years."

Money Market Accounts let you earn interest and stay "liquid"

A Money Market Account is a financial account that pays dividends, usually relatively more than you might make on a checking or savings account. They usually -- though not always -- have higher minimum balance requirements (often starting at $1,000 or higher), and may pay more as the account balance grows.

The advantage of a Money Market is that, unlike Certificates, you have access to your money whenever you might need it.

Being "liquid" like this gives investors an opportunity to make some money on funds that might otherwise be lying around in checking accounts or stuck in a high-risk investment. Yet they'll still have peace of mind, knowing they can immediately get to their money if they need to.

So, which type of investment is right for you?

"That really depends on the investor, their comfort level, the amount of capital they have to work with and what their financial goals are," Gangoy said.

Gangoy suggested making an appointment with a wealth advisor at your financial institution, explaining to them where you are, and more important, where you'd like to be in the coming months and years.

"We've been doing this for years and we can provide the experience and some fresh insight as to how to proceed," she said.

*APY = Annual Percentage Yield. APY is variable, is subject to change without notice, and is accurate as of August 1, 2016. Fees may reduce earnings. Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Govern­ment. National Credit Union Administration, a U.S. Government Agency. Go Green Money Market Yield of 1.01%APY on balances up to $250,000 and requires 30 or more Go Green Checking debit card transactions posted per month.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Coastal Federal Credit Union has contracted with CFS to make non-deposit investments products and services available to credit union members. Trust Services are available through MEMBERS Trust Company. CFS* is not affiliated with Members Trust Company.

This article was written for our sponsor, Coastal Federal Credit Union.

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