What to do when your CD matures
Is a CD right for you? Understanding certificates of deposit
Guide to CD renewal
4-min. read
Key takeaways
Most certificates of deposit (CDs) renew automatically at maturity unless you act during the grace period.
A renewed CD keeps the same term length but takes on the current interest rate, which may be higher or lower than your original rate.
The grace period usually lasts seven to 10 days, giving you time to withdraw, transfer or change your instructions without penalty.
You can stop or change a renewal through online banking, by phone or at a branch before the grace period ends.
Table of contents
Most CDs automatically renew at maturity unless you act during the grace period. Your bank typically moves the funds into a new CD with the same term length at the current interest rate. Knowing how CD renewal, grace periods and opt-outs work can help you avoid terms that no longer fit your savings goals.
What is CD renewal?
CD renewal is what happens when your CD matures and your bank rolls your principal and earned interest into a new CD. Most financial institutions renew CDs automatically unless you provide different instructions. Before the renewal, you typically have time to review the new terms and decide what works for you.
How auto-renewal works and what to expect
Before your CD matures, your bank typically sends a renewal notice with the maturity date, current renewal rate and deadline for making changes.
When the maturity date arrives, if you haven’t provided alternative instructions, your full balance – principal plus accrued interest – rolls into a new CD. The new CD generally has the same term length as your original deposit, but it carries the current interest rate, not your original rate. U.S. Bank will mail maturity notices about 14 days before the maturity date.
Understanding your CD grace period
The CD renewal grace period is a short window after maturity when you can withdraw your funds, change your renewal instructions or close your CD without penalty. This grace period typically lasts seven to 10 days, though the exact length varies by institution.
To avoid missing your grace period, mark your CD maturity date on your calendar and set a reminder a few days ahead. Review the renewal notice carefully, paying close attention to the new interest rate and the exact grace period dates.
Should you renew your CD or withdraw?
The right call depends on whether you need your money now, how today’s rates compare and what you’re saving for. Renewing may be a good fit if you want a predictable return and do not need the money right away. Withdrawing may make more sense if you need access to your funds or find a better rate elsewhere. Here’s a closer look at both options:
|
Option |
When it may make sense |
|---|---|
|
Renew your CD |
You don’t need immediate access to the funds; the renewal rate is competitive and you value predictable returns. |
|
Withdraw your funds |
You need liquidity; rates are better elsewhere or your savings priorities have changed. |
|
Consider an alternative savings strategy |
A CD ladder, step-up CD or money market account may better balance return potential and access. |
Option
When it may make sense
Renew your CD
You don’t need immediate access to the funds; the renewal rate is competitive and you value predictable returns.
Withdraw your funds
You need liquidity; rates are better elsewhere or your savings priorities have changed.
Consider an alternative savings strategy
A CD ladder, step-up CD or money market account may better balance return potential and access.
Explore CD accounts or learn more about the benefits of CD ladders.
How to stop or change your CD renewal
To stop or change your CD renewal, provide new instructions to your bank before the grace period ends. Follow these four steps:
- Review your renewal notice and confirm the maturity date, grace period and renewal rate.
- Decide whether you want to renew, withdraw, change terms or move funds to another account.
- Provide instructions before the grace period ends through online banking, by phone or at a branch.
- Confirm that your instructions were recorded correctly, so your funds are handled as intended.
If liquidity is a higher priority than locking in a fixed rate, moving funds to a high-yield savings account or money market account may be a better fit. Savings accounts offer more flexibility for withdrawals but typically have variable rates rather than the fixed rate a CD provides.
For a broader view of your options, a Guide to savings account alternatives can help you evaluate which product matches your current needs.
Get help with your CD renewal decision
You have options, and you don’t have to weigh them alone. U.S. Bank can help you compare choices that fit your savings plan. Schedule an appointment online to connect with a banker virtually, by phone or in person before your grace period ends.
Frequently asked questions
Does a CD automatically renew at maturity?
Yes, most CDs automatically renew unless you provide different instructions before maturity or during the grace period.
Will my CD renew at the same interest rate?
No. A renewed CD generally uses the current rate available for that term at the time of renewal, which may be higher or lower than your original rate.
How do I stop my CD from automatically renewing?
Contact your bank before the grace period ends and provide instructions to withdraw, transfer or change the renewal terms.
What happens if I miss the CD grace period?
If you miss the grace period, your CD may renew automatically into a new term at the current rate. Accessing your funds after that may result in an early withdrawal penalty.
Can I add money to my CD when it renews?
Many banks let you add funds during the grace period before your CD renews. Check your renewal notice or contact your bank to confirm whether additional deposits are allowed at renewal.
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