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Written by
Karen Bennett
Karen Bennett is a senior consumer banking reporter at Bankrate. She uses her finance writing background to help readers learn more about savings and checking accounts, CDs, and other financial matters.
Edited by
Brian Beers
Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.
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A certificate of deposit, also known as a CD, is an account that pays interest on your money for a set period of time. The end of the CD’s term — also referred to as the time it matures — is when you can choose to cash in the CD or renew it.
If you have a CD that’s nearing the end of its term, you may be wondering what’s involved with renewing it. It’s important to know your CD’s maturity date and whether you plan to let it automatically renew or cash it in.
Most CDs have set terms, which generally range from three months to 10 years. Your money is locked in until the term ends, at which time you’ll receive your principal investment along with the interest the CD has earned.
If you do nothing when the CD matures, the bank may automatically renew the CD for another term of the same length. It will earn whatever yield the bank currently pays for that term — and chances are it will be a different rate from the one you earned during the previous term.
For instance, say you have a five-year CD that pays a 2.75 percent annual percentage yield (APY) and is about to mature. If you choose to do nothing, the bank will likely renew the CD automatically for another five-year term at whatever rate it’s currently paying — which may be 4.5 percent, for instance.
Many banks will renew a CD — a process often referred to as an automatic rollover — if account holders do nothing when the CD’s term ends. For an automatic rollover, the bank deposits your funds into a new CD with the same term length, at whatever rate the bank currently is paying for that term.
Most banks provide a grace period when a CD matures — typically from 7 to 10 days — during which the account holder can choose to renew the CD or withdraw the funds without penalty.
If you choose to renew the CD and the bank’s policy is to roll it over automatically, simply do nothing during the grace period. The new APY may be higher or lower than the one you previously earned, depending in part on the general rate environment.
Generally, you shouldn’t let CDs automatically renew. It’s usually better to compare current CD rates to find the right CD for you.
Account holders commonly allow CDs to roll over at the time of their maturity.
Advantages of going this route include:
Consider several potential downsides before renewing your CD for another term:
Before you renew a CD, read the fine print and determine the following information, which can help you decide what to do when the CD’s term is up:
Many banks offer a grace period when their CDs mature. This allows you to compare rates elsewhere and decide whether you want to renew your CD with the bank. The grace period often begins the day after the CD’s maturity date.
The following table shows the CD grace period provided by various popular banks:
| Bank | CD grace period |
|---|---|
| Ally Bank | 10 days |
| Bank of America | 7 days |
| Bask Bank | 10 days |
| BMO Harris | 10 days |
| Bread Savings | 10 days |
| Capital One | 10 days |
| Chase | 10 days |
| Citibank | 7 days |
| Marcus by Goldman Sachs | 10 days |
| Synchrony Bank | 10 days |
| Truist | 10 days |
You may choose not to renew a CD if you need the money for other purposes or if you choose to invest the funds elsewhere. During the grace period for a CD that is maturing, you can do the following instead of allowing the CD to roll over:
Renewing a certificate of deposit is a relatively simple way to ensure your funds continue to earn interest if you are able to lock them in for more time. However, it’s best to compare rates elsewhere and consider whether there are better alternatives before committing to another term.
Arrow Right Senior consumer banking reporter
Karen Bennett is a senior consumer banking reporter at Bankrate. She uses her finance writing background to help readers learn more about savings and checking accounts, CDs, and other financial matters.
