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When you open a certificate of deposit (CD) with a financial institution, you agree not to touch the money you deposit in the account for a set period of time. In exchange for avoiding withdrawals during your CD term, you earn guaranteed, fixed interest on your money—often at a higher rate than you would receive elsewhere. 

Eventually, your CD will mature. At that point, you will need to decide what to do with your money next. (In fact, it’s wise to start thinking about your next money moves long before this CD maturity date arrives.) Below are five potential options to consider, along with some pros and cons associated with each choice. 

Open a New CD

There are many benefits to including certificates of deposit in your investing and savings portfolio. While these deposit accounts may not be the perfect fit for every situation, CDs can provide a low-risk location to store funds for certain savings goals. 

If a certificate of deposit fits in with your financial goals in the past, it makes sense that you might want to continue using this type of deposit account in the future. Yet even if you want to keep storing a portion of your savings in CDs, you still have some work to do. In these situations, it’s wise to start shopping around for the best CD rates long before your current CD matures. 

Finding the best annual percentage yield (APY) on a CD might involve changing banks or credit unions. And while doing so could involve a little more legwork on your end, the effort could be worthwhile if your earnings increase. 

You may also want to consider different types of CDs including: 

By taking the time to research your options upfront, you can make sure that you’re getting the best deal for your situation. Don’t assume that the CD that worked best for you last time will be the right choice now.

Recommended CD

CIT Bank Term Certificates of Deposit

Open CD

Member FDIC.

  • Our Rating 3.5/5 Read the review
  • Minimum
    Deposit Required
    $1,000
  • 1 Year APY0.30% More Info

    Annual Percentage Yield is accurate as of January 24, 2023. Interest rates for CIT Bank’s term CDs are variable and subject to change at any time without notice

  • 3 Year APY0.40% More Info

    Annual Percentage Yield is accurate as of January 24, 2023. Interest rates for CIT Bank’s term CDs are variable and subject to change at any time without notice

  • 13-Month APY4.65% More Info

    Annual Percentage Yield is accurate as of January 24, 2023. Interest rates for CIT Bank’s term CDs are variable and subject to change at any time without notice

CIT Bank offers a variety of term CDs ranging from six months to five years. Interest rates vary depending on term length, but generally CIT’s best rates come from slightly unusual term lengths, such as its 13-month CD. See site for details.

Overview

If you’re looking for a dependable way to earn interest on your money in the short-term, CIT Bank’s certificates of deposits may be an excellent choice for you. However, those looking to open a long-term CD may be better off looking elsewhere.

Pros

  • Strong rates for 13 and 18 month terms
  • FDIC insured

Cons

  • Rates for longer terms unimpressive

Let Your Bank Auto Renew Your CD

Some certificates of deposit come with a grace period after which an automatic CD renewal takes place. This grace period often lasts for around 10 days after the maturity date on your CD. However, you’ll need to read the fine print in your deposit agreement to learn more. If you don’t take action before the grace period expires, your financial institution might automatically roll your funds into a new CD. 

Sitting back and letting the bank or credit union do the work for you may sound appealing. (Who doesn’t like convenience?) However, there are some potential problems with this approach: 

  • You need to review your deposit agreement to confirm that an automatic CD renewal will occur. Many banks and credit unions have different rules. 
  • If a bank rolls your cash into a new CD, you might not get the most competitive interest rate available. Another financial institution might be offering a higher APY and you could miss out. 
  • The term on your new CD might be longer than you want. (A roll-over CD will generally match the term on your previous CD but that could be too long depending on your current circumstances.) 
  • If you want to access the funds from your new CD before it matures, you will likely face an early withdrawal penalty. 

Consider Other Investment Opportunities

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When your CD matures, it provides you with an opportunity to reevaluate your financial goals. If you’re in a position to tolerate more risk with your money, you might want to think about investing your cash in other ways such as investing in mutual funds, IRAs or stocks. You can talk to a trusted financial advisor for guidance if you’d like professional insight into your specific situation.

Pay Down Debt

You work hard to save the money you store in a CD. As a result, many people don’t like to think about spending that cash when a certificate of deposit matures. However, if you’re carrying debt (especially high-interest debt like credit cards), you might want to crunch the numbers and evaluate whether using those funds to pay down your account balances makes sense. 

According to Experian™, the average American owed $5,589 in credit card debt (Q1 2022 data). So, if you’re struggling with outstanding credit card debt, you’re far from alone. Of course, cashing in your mature CD isn’t the only way to get out of debt. But it’s an option worth considering. 

Open a Different Type of Deposit Account

Another option to consider when your CD matures is withdrawing the funds and moving them to a different type of deposit account. This option could be a good fit if your financial goals have changed or if you might need to access the cash from your CD in the near future. 

Consider the following scenario. Imagine that you have been saving money for a down payment on a home. Knowing that the process would take several years, you stored a portion of the cash you had already saved in a 24-month CD. 

Now the CD is mature and you have put away additional funds in a high-yield savings account (HYSA)—nearly enough to reach your goal. In this situation, you might opt to withdraw the funds from your mature CD and add the money to your HYSA or perhaps put all the cash into a short-term CD (depending on which option offers the highest APY).

UFB Direct Best Savings Account

Open Account

at UFB

  • Our Rating 5/5 Read the review
  • APY4.21% More Info

    UFB Direct breaks balances into five tiers, but, currently, there is only one interest rate.

  • Minimum
    Deposit Required
    N/A
  • Intro Bonus N/A

The UFB Direct Best Savings Account offers one of the highest interest rates available for your money. The UFB APY is up to 4.21% on your balances, the highest interest rate offered by the bank. There are no monthly maintenance fees and no minimum balance to open your account.

Overview

With one of the strongest high-yield savings interest rates on the market, as well as no monthly fees or minimum opening deposit, UFB Direct’s Best Savings Account is an extremely attractive package.

Pros

  • Strong interest rate
  • No maintenance fees or minimum monthly balances
  • Free complimentary ATM card
  • Mobile app and SMS banking

Cons

  • No signup bonus
  • No associated checking account

Next Steps

Your best bet is to plan ahead and try to figure out what you want to do with your cash before your CD matures. By doing your research in advance, you’ll have more time to weigh different options. 

Not sure where to begin? The guides below can be a great place to start. 

ML

Michelle Lambright Black

Michelle Black is founder of CreditWriter.com and HerCreditMatters.com. Michelle is a leading credit card journalist with over a decade and a half of experience in the financial industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, small business, and debt eradication. Michelle is also a certified credit expert witness and personal finance writer.