When you purchase a CD, it’s important to understand what the maturity date of your CD means. “Maturity” simply means the date that your CD term ends. When your CD reaches maturity, the money in your account is released and you can do with it as you like. Typical CD maturity dates can be six months, a year, five years or even ten years.
Typically, when the CD reaches maturity, most banks will automatically renew, or “roll over,” your CD if they have not received instructions from you to do otherwise. This “renewal” generally means that they will put your money into a new CD for the same term as your old one. However, if market interest rates have changed since the last time you purchased the CD, you may be “rolled over” into a CD with a lower interest rate. That’s why it’s important for you to keep track of your CD’s maturity date and take an active role in what happens to your investment. If you aren’t paying attention, you may find your cash tied up in a lower-rate CD with a five or ten year term.
It’s fairly simple to keep track of your CDs maturity date: your bank will send you a notice when your CD is about to come due, and request your instructions on how to proceed. You should also be able to find the maturity date in your online banking information. And of course, you can always call the bank and ask them. It’s a good idea to simply put the date on your calendar so you will be sure not to miss it.
It pays to plan ahead for your CD’s maturity date. Before your CD is due to mature, shop online for the best CD rates and the high yield CDs, so that you are prepared when your CD investment has reached its maturity. Be ready to move your money to a different institution, if necessary. With a little effort, you will be sure to always get the best certificate of deposit rate for your investment.
