Understanding a Small Saver Certificate (SSC)

Understanding a Small Saver Certificate (SSC)

If you're shopping for a savings account for a minor child or young adult with minimal or no balance requirement and a short maturity period, try a Small Saver Certificate (SSC).

What Is a Small Saver Certificate?

Small saver certificates, or SSCs, are deposit savings accounts with minimal to no balance requirements and a maturity period ranging from 3 to 24 months. Typically, this type of account targets young adults or minors who are beginning to save money for the first time and will make smaller deposits.

SSCs were first set up in the 1980s to provide banks with short-term deposits with a maturity period of 18 months. This type of account was for helping banks compete with money market accounts with the same maturity window.

Later on, young adults and children were primarily using SSCs to start saving money.

Some of the essential characteristics of an SSC are:

  • SSCs are deposit savings accounts with minimal or no balance requirements.
  • SSCs have a fixed interest rate for the specific term or a variable interest rate, depending on the industry's benchmark.
  • SSCs typically have a maturity period of 3, 6, 12, 18, or 24 months.
  • SSC investors are primarily young adults and children.
  • Children can use SSCs to begin saving smaller amounts. This practice can ease a smooth transition into more complex investing accounts.
  • SSCs are not as common and are primarily available through credit unions. Investors typically prefer certificates of deposit accounts to SSCs for short- to medium-term investments.

Advantages and Disadvantages

An SSC can help young people develop a savings mentality early on. In addition, due to the nature of an SSC, young adults can make smaller deposits within a fixed term.

Once they get an idea of investing in a deposit savings account, they'll be able to move on to more complex investments, like stock exchanges or investment accounts.

An SSC can also help banks develop their younger investors as prospective customers. For example, most banks and credit unions encourage young investors to set up bi-weekly or monthly recurring deposits.

Most SSCs do not carry monthly fees and are FDIC- or NCUA-insured, allowing young adults to invest in a safe and controlled environment. Some SSCs also come with checking account-like features like online and mobile banking and paperless check options.

An SSC's main disadvantage is having a much lower interest rate than the industry standard. In addition, SSCs renew automatically at a lower rate. After maturity, investors can transfer the funds from the SSC to a different savings instrument like a CD or money market account for better returns. However, some SSCs still have more competitive terms that match CD's interest rate and maturity period to lure in young investors.

Using a Small Saver Certificate

A young adult or minor should start investing with an SSC. Saving in an SSC is easy due to its minimum or zero balance requirements. In addition, the shorter maturity period with a decent interest rate also helps.

The primary purpose of an SSC is to teach someone how to save for a fixed term. Typically, this applies to young adults and minors looking to be more responsible.

Here are some facts you need to know before investing in an SSC:

Withdrawing From an SSC

Small saving certificates are deposit savings accounts that function similarly to a CD. Like a CD, the funds should stay in your SSC until its maturity date, and then you can withdraw the funds without penalty.

SSC vs. Savings Account

While both types of accounts are FDIC- or NCUA-insured, savings accounts are more flexible since they allow withdrawal over a period without penalty. However, SSCs are similar to CDs since they need to hit their maturity date before the withdrawal.

Adding Money to an SSC

SSCs are available in small denominations, like $100 and $200. While some institutions allow you to add money to the account after opening, typically, you'll increase your deposits by opening new ones.


SSCs are simple deposit instruments that can teach young adults and minors how to save. However, while they can be a great way to build better savings habits, they do not earn like other savings tools.