What happens to the funds in a certificate of deposit after the maturity date?

After the maturity date of a certificate of deposit (CD), you have several options regarding the funds in the account:

1. Roll Over: You can choose to roll over the funds into a new CD with the same or a different financial institution. This allows you to continue earning interest on your investment. You may have the option to select a new maturity date and terms for the rolledover CD.

2. Withdraw: You can withdraw the funds from the CD without incurring any penalty. However, if you withdraw the funds before the maturity date, you may lose a portion of the interest earned, as early withdrawal penalties may apply.

3. Renew Automatically: Some financial institutions may automatically renew the CD for another term if you don't take any action before the maturity date. The renewed CD will typically have the same terms as the original CD, unless you request any changes.

It's important to note that if you do not take any action, some financial institutions may automatically renew the CD for the same term but at the prevailing interest rate, which may be different from the rate you originally received. Therefore, it's advisable to review your options and communicate your preferences to the financial institution before the maturity date.

To ensure that you make an informed decision about what to do with the funds in your CD after the maturity date, it's recommended to contact your financial institution in advance and discuss the available options. They can provide specific details regarding the process, potential fees or penalties, and any special promotions or rates they may offer for renewals or new CDs.