Certificates of Deposits (CDs) are a popular savings tool for those looking to earn a higher interest rate than a regular savings account. Understanding the concepts of CD maturation dates and rollover rates is crucial for maximizing your investment. Here are some helpful tips to get you started.

What is a CD Maturation Date?

A CD's maturation date is when the CD term ends. At this point, you have several options for what to do with your funds. The term length of a CD can vary, typically ranging from a few months to several years. Generally, the longer the term, the higher the interest rate you can expect to earn.

What Happens When a CD Matures?

When the CD reaches its maturation date, you generally have a short window of time, known as the grace period, to decide what to do next. This period often lasts 7 to 10 days, depending on your financial institution. During this time, you can:

1. Withdraw the funds without any penalties.

2. Renew the CD by letting it roll over into a new one with a similar term.

3. Transfer to another account, such as a savings or checking account.

What is a CD Rollover?

A CD rollover occurs when your bank automatically reinvests the funds from a matured CD into a new CD. This new CD will usually have a similar term length but might come with a different interest rate, as rates and offers change over time.

What is a CD Rollover Rate?

CD rollover rates refer to the interest rates applied when a CD renews at the end of its term. When a CD matures, if you don’t withdraw the funds or transfer them to another account, the bank may reinvest the principal and interest into a new CD. The new interest rate, or rollover rate, can vary based on current market conditions, the length of the new CD and bank policies. Sometimes, your bank may offer special rollover rates to incentivize you to renew the CD.

Tips for Managing CD Rollovers

Monitor maturity dates. Keep track of when your CDs are set to mature so you can make timely decisions. If you have a Cadence Bank CD, we will contact you before your CD matures, giving you time to plan your next move.

Consider your financial goals. Decide whether you need immediate access to your funds or if you can afford to lock them away for another term to earn more interest.

Understanding these CD fundamentals can help you make informed decisions and maximize your savings potential. If you are interested in opening a Certificate of Deposit or want to know what rates are available, click here to learn more about CDs or find a Cadence Bank location to get started.

Sources:

https://www.forbes.com/advisor/banking/cds/when-a-cd-matures/

https://www.consumerfinance.gov/ask-cfpb/what-is-a-certificate-of-deposit-cd-rollover-or-renewal-en-923/

https://cadencebank.com/personal/savings/cds

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.