When your certificate of deposit (CD) reaches maturity, the decisions you make next can significantly impact your financial future. CDs are low-risk, interest-earning accounts with predetermined terms, but the maturity of your CD represents a pivotal opportunity rather than an endpoint. To ensure you continue to grow your investment, it’s crucial to avoid these four common pitfalls that many investors face.
1. Take Advantage of the Grace Period to Maximize Your Earnings
Most CDs come with a grace period of seven to ten days post-maturity, allowing you to make informed decisions regarding your funds. This grace period is often overlooked, but it’s vital for your financial strategy. Missing out on this window can lead to automatic renewals into a new CD with potentially lower interest rates, significantly affecting your overall returns.
Before taking any action, closely review the specific terms of your CD, noting the exact duration of your grace period. Failing to act within this timeframe could result in your cash being locked into a new CD with a rate that may not be competitive in today’s market. Stay proactive to ensure your investments are working for you.
2. Evaluate Your Options Before Automatically Rolling Over Your Funds
If you do not specify otherwise, most financial institutions will automatically roll your funds from an expired CD into a new CD once the grace period concludes. While this may seem convenient, it restricts your ability to choose the most favorable rates available in the market.
Explore Top High-Yield Savings Accounts for 2025
American Express® High Yield Savings Member FDIC. APY 3.80%
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Member FDIC.
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3.80%
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$0 |
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Barclays Tiered Savings Member FDIC. APY 4.25%
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Member FDIC.
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4.25%
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