After you put money in a certificate of deposit, you can sit back while it collects interest over its term. Once it reaches maturity, you’ll face a decision: Renew it or withdraw the funds.
Typically, you have a grace period of about seven to 10 days after a CD hits its maturity date to decide what to do. Your bank may send you a notification a few weeks before the certificate matures.
When you open a CD, it’s also a good idea to put a reminder on your calendar of when the certificate is nearing the end of its term. With this in mind, we'll explain what happens if you miss your grace period, whether now is a smart time to renew with rate cuts and where to find the best CD and savings rates.
What happens if I miss my grace period?
If you don’t act during the grace period, most banks will automatically reinvest the funds into a CD with the same term or a similar one, and the interest rate will typically match what the bank is offering for that maturity on new CDs.
Whether you should renew depends in part on how you’d like to use the money. If you don’t need the cash now, reinvesting may make sense as part of your longer-term savings plan.
Evaluate the interest rate. "Rates on top-yielding CDs are still outpacing inflation," says Ted Rossman, senior industry analyst at Bankrate.
How Fed policy impacts savers
However, as the Federal Reserve lowers short-term rates — it made cuts of a quarter-point in September, October and December, with more reductions likely on the way — CD yields also fell.
If you have a CD coming up for renewal soon, you may want to reinvest in a high-yield certificate, whether from the same institution or a different one, to lock in the yield before rates drop further.
We’ve listed top-yielding one- and five-year CDs (check the institution’s current rates before you invest).
The best one-year CD rates
Account |
APY |
Min Deposit |
Early Withdrawal Penalty |
|---|---|---|---|
4.05% |
$1,000 |
3 months of interest |
|
3.90% |
$5,000 |
3 months of interest |
|
3.85% |
$500 |
3 months of interest |
|
3.85% |
$500 |
3 months of interest |
|
3.85% |
$1,000 |
3 months of interest |
The best five-year CD rates
Account |
APY |
Min. Deposit |
|---|---|---|
4.00% |
$500 |
|
3.90% |
$500 |
|
3.90% |
$500 |
|
3.80% |
$500 |
|
3.80% |
$5,000 |
|
3.75% |
$500 |
|
3.60% |
$1,000 |
|
3.56% |
$500 |
You can also compare rates at depositaccounts.com/cd.
If you’d rather not commit to a CD but need a place to park your cash, consider a high-yield savings account.
Best high-yield savings accounts
Account |
APY |
Min. opening deposit |
|---|---|---|
4.35% |
$0 |
|
4.25% |
$2,500 |
|
4.10% |
$100 |
|
4.05% |
$0 |
|
4.02% |
$500 |
|
4.00% |
$1,000 |
|
4.00% |
$5,000 |
