Every certificate of deposit matures on a specific date, at which point you can collect your principal investment and the interest paid over the life of the CD. In most cases, the financial institution will automatically renew the CD, but there may be unwanted fees or long-term investment periods involved. Learn what happens when a CD matures and what to do about it. Bank and credit unions will hold them for you in some way. However, their policies may not be to your liking. With careful planning, you can avoid forgetting about your maturing CDs and never worry about what will happen to them without your guidance.
CDs generally pay higher interest rates than the rate paid on savings accounts because you've promised to keep your money locked up for a certain amount of time. You get to choose how long your CD lasts. Common choices include:. On your statements online or on paper , you might see the date that you purchased the CD or the date that the CD comes due. Some CDs allow you to pull funds out before maturity — without any penalty. Your bank or credit union is required to send you a notification shortly before your CD matures see Regulation DD. Pay attention to these notices, especially:.
When a CD matures, there is a 7 day grace period to make any changes to the account. The grace period begins the calendar day after the maturity date and lasts seven calendar days. During the seven calendar-day grace period or on the actual date of maturity you may:. Renewing a CD account :.