Got a CD Maturing Soon? Here Are 3 Things You Should Know

If you have a certificate of deposit (CD), you already know that there are many benefits to these products -- namely earning a guaranteed interest rate for a predetermined amount of time. But CDs can be easy to forget since you may not have to deal with them until months or even years later.

So if you have one coming to maturity soon, here are your options for handling that cash.

1. Do nothing

It's a high interest rate environment. So if you can afford to leave your money in a CD for another term, it can be an excellent way to lock in those high rates and avoid losing money if rates dip in the future. Many banks allow you to automatically renew the term you originally selected without having to do anything, so it's also the most low-effort option here.

The CD rate would be based on their current offerings, rather than keeping your previous APY. However, you should still at least consider the other two options here, since you may have different needs.

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Capital One 360 Performance Savings APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.	Min. to earn $0
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UFB Portfolio Savings Account APY 5.15% Rate info To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts. Min. to earn $0 Open Account for UFB Portfolio Savings Account On UFB's Secure Website. Member FDIC.	APY 5.15% Rate info To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.	Min. to earn $0

Your bank is required to send you a notice before the maturity date of your CD if the term was longer than a year, and if the CD did not renew automatically. But if your CD falls outside of those bounds, you should look at your CD terms before your maturity date to make sure it auto-renews.

2. Shop around for better rates and terms

You may have gotten an excellent rate on your previous CD, but that doesn't mean there aren't better options out there for your next term. For example, you may find higher rates at another bank or more term options.

You may also prefer to go with a no-penalty CD, which doesn't charge an early withdrawal fee after a certain period. For example, Marcus by Goldman Sachs has a no-penalty CD that lets you withdraw your full balance beginning seven days after funding, fee free! (For reference, federal law sets a minimum fee of seven days' worth of simple interest if funds are withdrawn within the first six days.)

By contrast, if you have a $5,000, 5.00% APY CD with an early withdrawal penalty of 90 days' worth of simple interest, you'd end up paying just shy of $62 to take those funds out ahead of schedule. This type of CD can be especially helpful if you're feeling a bit less confident about tying up a chunk of cash for a significant period of time.

Regardless, you should be sure that the CD you choose meets your needs and doesn't have any deal breakers in the fine print. That means considering the rate, minimum deposit, and the fee structures.

3. Take the money and run

Many CDs come with a grace period -- the time after the maturity date that you can withdraw your funds (plus interest) and not have to pay a penalty fee. Those are determined by your bank, so they can vary. For example, Bank of America has a grace period of up to seven calendar days, but it can be as short as a single day. U.S. Bank, by contrast, has a 10-day grace period for all CDs.

So if you find yourself in a situation where you need easy access to that cash, withdrawing your money could be the best option, even if you won't be earning as much in interest in many other accounts. In that case, you may want to keep that cash in a high-yield savings account (HYSA) to earn a comparable rate without locking it away for months or years at a time.

Investing money for the future is always a good idea, but it should never come at the expense of your current finances. But as long as you take the time to consider your options ahead of your CD maturity date, you'll be able to choose the best option for your circumstances. And that can only help you avoid missteps in the future.