Key Takeaways
- If you have a CD nearing maturity, you have a brief window to decide what to do with your funds.
- Miss the deadline and your money may automatically roll into a default CD you might not like—locking you into another term and quite possibly a lousy rate.
- If you want another CD, you can almost always do better by shopping today’s best CDs for a significantly higher APY than your roll-over offer.
- But act quickly! The Fed could cut interest rates soon, which would start pushing rates down on new CDs.
- Need to keep your money more accessible? Consider moving some or all of your CD funds to a top high-yield savings account.
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2 Reasons To Act Right Now for a Maturing CD
Anytime you have a certificate of deposit (CD) approaching its maturity date, it’s important to give it some time-sensitive attention. But right now, there’s added reason to get ahead of the game—rather than play catch-up later and likely lose money in the process.
That’s because most maturing CDs are automatically rolled into a new CD at the same institution—unless you give other instructions by the bank’s deadline. Unfortunately, default CDs for roll-overs tend to pay sub-par rates, which means your inaction could result in being locked into a new CD term you may not want and at a rate that’s much lower than you could have guaranteed elsewhere.
Adding to the urgency is the current interest rate environment. While the Federal Reserve is expected to keep rates steady at its meeting next week, a rate cut is seen as likely in September, according to the latest probabilities from CME Group’s FedWatch Tool.
What’s more, the Fed could signal in its statement or press conference on Wednesday that a rate cut is imminent. If the odds for a September rate cut rise next week based on their comments, banks and credit unions may start lowering CD rates before the September meeting.
CD roll-overs strip you of options
Automatic CD rollovers may seem convenient, but they limit your choices. They lock your funds into a new rate that’s typically lower than what’s available elsewhere. Plus, they double the time your money is tied up—turning a 1-year CD into a 2-year commitment, a 2-year CD into a 4-year one, and so on. By opting out of the rollover, you regain control to make the best choice for your money right now.
What to Expect When Your CD Matures
Each CD has a maturity date based on the term you chose and when it was opened. On this date, you can withdraw your money—including all earned interest—without facing an early withdrawal penalty.
Weeks before this date, your bank or credit union will contact you, often by letter, email, or secure message. They’ll remind you of your CD’s maturity date and provide instructions on how to choose what to do with your funds. This could include a reply form or instructions for online banking or phone options.
You’ll typically have four options:
- Transfer the funds to another account at the same institution
- Transfer the funds to an account at another bank
- Receive the funds by paper check
- Let the CD roll into a new default CD at the institution
To select any of the first three options, you must submit instructions before the deadline. If you miss it, your funds will automatically roll into a default CD—and you may not be happy with the result.
Missed the deadline? Check for a grace period
Most institutions offer a grace period for newly opened CDs. So if your funds were rolled over into a new certificate, you may still be able to undo the roll-over—if you act fast. Grace periods typically range from 5 to 10 days, but they vary by institution.
Smart Steps to Take With a Maturing CD
Whether or not you opt to move your money into a new certificate, here are four tips for making the best moves with your existing CD.
Step 1. Decide If You Want Another CD
If you’re unsure about committing your maturing funds to another CD—especially if you might need the money for something else—consider moving it to a high-yield savings account. Some of the best options offer up to 5.00% APY right now, providing a solid return while keeping your funds fully accessible. The top money market account in our rankings also offers 5.00%, while adding the perk of allowing you to write paper checks.
However, with Fed rate cuts likely this year—and possibly beyond—savings account rates could decline. That means returns of 4–5% might soon fade, and next year, rates could fall even lower.
That makes a new CD at one of today’s top rates a great option if you don’t need the funds from your maturing certificate. Since CDs offer you a locked-in rate guarantee, it won’t matter how much the Fed cuts interest rates. Your CD will continue paying its advertised annual percentage yield (APY) until it matures.
Fed Rate Cuts Likely in September and Beyond
According to the CME Group’s FedWatch Tool, financial markets are currently pricing in a 62% chance of a Fed rate cut on September 17, plus about a 60% probability of at least one more cut by the end of 2025.
Step 2. Start Shopping Today’s Best CD Rates
If you decide to go with another guaranteed rate from a CD, start shopping as soon as you receive notice of your expiring CD. First, check the rate your current bank is offering for the CD your funds would roll into. Then, compare that rate to today’s top CD rates in our rankings. This will help you determine whether your current bank’s rate is competitive, as well as help you decide the CD term that will work best for you based on today’s offers.
Warning
If your CD isn’t maturing for another month, the rates you see today on your bank’s website might not be the rates you’ll get when your CD actually matures. With rates likely to decline, the APY you receive at maturity could be significantly lower. This is another reason to take control of your funds instead of letting them automatically roll over.
Step 3. Communicate Instructions for Your Current CD
If you’re unsure about what to do with your CD funds before maturity, instruct the bank to transfer the balance into a savings account—either at the same bank or another where you already have an account. This is a smart move, as it gives you flexibility no matter what you decide to do next.
Just be sure to provide your instructions before the deadline to avoid the risk of your funds moving into a CD you don’t want.
Step 4. Set Yourself Up for Future CD Success
If you’ve decided to go with a new CD, it’s smart to lock in the best rate you can find for a term that matches your financial goals. With CD rate reductions likely on the horizon, the sooner you lock in, the higher the APY you may be able to secure.
In fact, if your current CD isn’t maturing for another month or two and you can afford to be double-committed for a short time, consider opening a new CD now. This could allow you to lock in a better rate before rates decline further.
Pro tip from savvy CD savers
Whenever you open a new CD, set a reminder for a month or two before it matures. This gives you time to make an informed decision about how to handle your funds. It will also help you if the bank hasn’t sent you a timely notice with guidelines for submitting your instructions.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
Important
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
