What Happens When a CD Matures: Options and Strategies 

Financial priorities often shift over the course of your lifetime. Maybe you have been planning ways for paying off school debts, growing your savings for a future home purchase, banking funds for the trip of a lifetime, or planning for your kids’ education. Choosing to open a certificate of deposit (CD) is a popular choice for many people’s savings strategy.  

But what happens when a CD matures? Understanding your options can help you make the best choice for your financial future. If your CD maturity date is approaching, here are some strategies to help you decide what’s next. 

CD Maturity Options: What Should I Do?

When a CD reaches its maturity date, you have a few key options to consider. At maturity, your CD stops earning interest at the rate initially agreed upon, meaning you’ll need to decide what to do with the funds. There’s no one-size-fits-all approach, but having a CD strategy can ensure that your money continues to work for you. 

Here are the three main options you’ll encounter at CD maturity: 

Renew the CD  

One of the simplest options is to renew your CD for another term. Most banks allow you to renew the same CD with a similar term, though the interest rate may change. This option is ideal if you’re happy with the interest your money has been earning and you don’t need immediate access to the funds. It’s a hassle-free way to continue growing your savings. 

Reinvest in a New CD 

Many people choose to reinvest their CD funds into a new CD with a different term or a higher interest rate. Depending on the circumstances, you may be able to take advantage of better rates or opt for a longer or shorter term. This option gives you the flexibility to align your CD strategy with your current financial goals. 

Withdraw the Funds 

If you need access to the funds, you can choose to withdraw your principal plus any interest earned. Maybe you’re planning a large purchase, such as a home renovation, or want to diversify your investments. Withdrawing your CD funds allows you to put your money to use right away. Be sure to consider alternative savings or investment options to continue growing your wealth. 

Are you a business owner? Click here for more information on how a certificate of deposit can work for a business strategy.

What to Do When a Certificate of Deposit Matures

Navigating what to do when your certificate of deposit matures is easier when you know what to expect. Here’s a simple step-by-step guide for managing your CD at maturity: 

• Review Your CD Terms: Before your CD matures, take a look at the original terms to understand when the maturity date is and how much interest your CD has earned. 

• Evaluate Your Current Financial Needs: Consider your financial situation: Do you need the funds for immediate use, or are you comfortable keeping them in a long-term investment?  

• Decide on a Strategy: Choose whether you want to renew the CD, reinvest in a new CD, or withdraw the funds. Your decision should be based on your financial goals and the current market rates. To help you stay on track, create a calendar reminder for your CD’s next maturity date or when you plan to review your savings goals. Staying proactive will ensure you make the most of your investments year after year. 

• Act Before the Grace Period Ends: Most banks offer a grace period—typically 10 days after the maturity date—where you can decide what to do with your CD.  

After you’ve decided on the best course of action, it’s essential to keep your financial goals in mind. Consider setting up a meeting with a relationship banker to review your overall savings strategy. This can be a great opportunity to explore other investment options. 

Uncover Your Options When Your CD Matures

When a CD matures, it opens up an opportunity to reassess your financial strategy and take control of your savings. Whether you choose to renew, reinvest, or withdraw, the key is making an informed decision that aligns with your current financial needs.

Ready to explore your CD maturity options? Contact Quaint Oak Bank to learn more or use the form below to get started.