Can I automatically renew my CD when it matures, or do I need to take action?
Curious about Certificates of Deposit
Whether your Certificate of Deposit (CD) automatically renews or requires action on your part when it matures depends on the terms and policies of the financial institution where you hold the CD. Here are the two common scenarios:
1. Automatic Renewal: Many banks and credit unions have an automatic renewal policy for CDs. If your CD falls under this policy and you don't take any action before the maturity date, the financial institution will automatically renew the CD for a similar term. The renewed CD will typically have the current interest rate offered by the institution for that term.
2. No Automatic Renewal: Some financial institutions do not have an automatic renewal policy. In such cases, your CD will not automatically renew when it matures. Instead, the institution may transfer the funds into a standard savings or checking account, or they may provide you with options to choose a new CD term or withdraw the funds.
To determine whether your CD will automatically renew and what the renewal terms will be, you should:
Review the terms and conditions of your CD agreement: This information is typically provided in the initial CD disclosure or agreement that you received when you opened the CD.
Contact your financial institution: If you're unsure about the renewal process or want to explore your options, it's a good idea to contact your bank or credit union before the CD matures. They can provide you with specific details about their policies and help you make an informed decision.
If you do not wish to renew your CD automatically, be sure to take action before the maturity date. You can either withdraw the funds or choose a different CD term if your financial institution offers that option.
It's essential to review the terms of your CD agreement and communicate with your financial institution to ensure that your CD is managed according to your preferences when it matures.