What Happens to the Certificate of Deposit at Maturity?
1. Renewal: Many financial institutions offer the option to renew the CD for another term with the same or a different duration. If you choose to renew, the funds, along with any accrued interest, are reinvested into a new CD with the agreed-upon terms and current interest rate.
2. Withdrawal: You can choose to withdraw the full amount of the CD, including the principal and any interest earned. Depending on the institution’s policies, you may have the option to receive the funds via a check, direct deposit, or transfer to another account.
3. Rollover: Some depositors opt to roll over the matured CD funds into a different investment vehicle or savings account, such as a different type of CD, a savings account, or a brokerage account.
4. Automatic Renewal or Rollover: If you do not take any action when the CD matures, some financial institutions may automatically renew or roll over the CD for the same duration as the original term. In such cases, it’s essential to review the terms and interest rate of the renewed CD to ensure they align with your financial goals.