What Happens After Your Certificate Hits Maturity
Having a certificate is both a smart and safe way to grow your money. In this blog, we’ll go over what a certificate is, what maturity is, and what you can do after your CD matures.
What is a Certificate?
Before we get into what happens after a certificate matures, let’s go over what a certificate is. A certificate of deposit, or CD, is an account that offers higher interest rates than a regular savings account. You cannot withdraw any money from a CD until it reaches its fixed date, commonly known as maturity.
What is Maturity?
CD maturity is the date when your account stops earning interest and you can now withdraw funds. You can choose how long you would like your CD term to be. Typically, the longer the term, the higher the interest rate.
What Happens After a CD Matures?
When your CD is coming up on its maturity date, you may get a letter from your bank, letting you know it’s coming up on its maturity date. This will give you some time to go over your options and decide what you’d like to do after it matures. Let’s go over the different options you’ll have.
Renew the CD
If you don’t need the funds right away, it could be wise to renew the CD. If you don’t let your financial institution know what you would like to do with your funds, they will typically automatically renew your CD. Your CD may have the same terms that it previously had, but you should check with your financial institution ahead of time to know what the terms will be if you renew your CD.
Withdraw Your Funds
If you need your funds, you can withdraw them once the CD hits its maturity date. Typically, you will have ten days after maturity to do this. Your account will be closed once the funds are withdrawn.
Open a Different CD
If you looked around and found a CD that has better rates, you may want to move your money to that CD rather than renewing your current one. To get the highest return, you’ll want to take advantage of a CD that has a higher interest rate. View our CD rates.
Open a Money Market Account
If you still want to earn interest but anticipate needing to use your money, opening a money market account could be a great fit for you. They don’t have a maturity date, but they still have higher interest rates than a normal savings account. View our money market rates.