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You opened a certificate of deposit expecting to leave your money untouched for six months, one year, or perhaps several years. Then the maturity date arrives. What happens next?
When a certificate of deposit (CD) matures, the original term ends, and you generally reach a decision point. Depending on your bank or credit union and your account terms, you may be able to withdraw the money, transfer it elsewhere, or put it into another CD. Some CDs automatically renew if you don’t give the institution different instructions.
The important detail is that you shouldn’t assume your old interest rate, grace period, or renewal terms will continue automatically. Here’s what happens when a CD matures and what you should consider before deciding what to do with the money.
What Does It Mean When a CD Matures?
A CD matures when the agreed-upon term ends. For example, suppose you deposit $10,000 into a 12-month CD. If the CD starts on October 1, 2025, its maturity date will generally fall around October 1, 2026, depending on the account’s terms.
At maturity, the CD has completed its contractual term. You can then generally access the money in accordance with the institution’s maturity and renewal rules.
The money you receive may include:
- Your original deposit
- Interest earned during the CD term
- Previously credited interest if it remained in the account
- Any other amounts specified in the CD agreement
What happens to that money next depends on the CD’s terms and the instructions you give the bank or credit union.
Read: How to Transfer a Certificate of Deposit
What Happens to Your Money When a CD Matures?
There are generally three possibilities. You can:
- Withdraw or transfer the money
- Renew or roll the money into another CD
- Take no action and allow the CD to renew automatically if the account has an automatic-renewal provision.
The Consumer Financial Protection Bureau notes that some CDs don’t have a rollover feature. In those cases, the CD stops earning interest when it matures, in accordance with the account’s terms. Other CDs automatically renew unless you tell the bank not to. That’s why it’s important to check your maturity notice and account agreement.
What Is a CD Grace Period?
A CD grace period is a period after maturity during which you may be able to make changes to the account without triggering an early-withdrawal penalty. For an automatically renewing CD, the grace period can give you time to:
- Withdraw your money
- Transfer it to another account
- Change the amount invested
- Add money to the CD, if permitted
- Choose a different CD term
- Decline renewal
There is no universal grace period that applies to every CD. Many institutions offer a grace period of around seven to 10 days, but the exact period depends on the bank or credit union. Some institutions have different rules for different CD products.
Federal consumer-disclosure rules require an institution that automatically renews a time account to disclose whether a grace period is provided and, if so, its length.
So don’t assume that you have two weeks simply because another bank gives customers 14 days. Check your maturity notice and CD agreement.
What Happens If You Do Nothing When Your CD Matures?
If your CD automatically renews and you don’t provide different instructions, the bank may roll the money into a new CD. The new CD may have:
- A new interest rate
- The same or a different term
- Different withdrawal provisions
- Different minimum or maximum deposit rules
- Different promotional terms
Most importantly, the new interest rate is not necessarily the same as the rate on your original CD. The CFPB specifically recommends comparing rates before allowing a CD to roll over because the new rate may be higher or lower than your previous rate.
Automatic renewal is convenient, but that convenience doesn’t necessarily mean you’re getting the best return on your money.
Read: What Does the Loan-to-Deposit Ratio Mean?
Does a CD Automatically Renew?
It depends on the CD. Some CDs automatically renew at maturity. Others don’t. If automatic renewal applies, the bank generally provides information about the renewal before the maturity date. The disclosure should explain whether the CD will renew and what happens if you don’t want it to.
Your maturity notice is therefore worth reading rather than treating it as a routine bank message. Look for:
- Maturity date
- Renewal date
- Renewal term
- New interest rate or APY
- Grace-period length
- Instructions for withdrawing funds
- Instructions for changing the renewal
- Any changes to account terms
Does a New CD Get the Same Interest Rate?
Not necessarily. When your original CD matures, the bank generally isn’t required to give you the same interest rate for a new CD.
The replacement CD is a new deposit arrangement with a new rate based on the institution’s current offerings.
For example, imagine you opened a 12-month CD when rates were relatively high. You earned 4.50% APY during the original term. At maturity, the bank could offer a new 12-month CD at 3.50% APY.
If you allow automatic renewal without checking the new rate, your money could earn substantially less during the next term. The opposite can also happen. The new rate could be higher. The key point is that the original rate shouldn’t be assumed to carry forward.
Should You Let Your CD Automatically Renew?
Automatic renewal isn’t necessarily a bad choice. It can make sense if:
- You still want your money in a CD
- The new rate is competitive
- The new term fits your financial plans
- You don’t need access to the money
- The CD remains appropriate for your risk and liquidity needs
But automatic renewal deserves a review before you let it happen.
Ask yourself:
- Is the new APY competitive?
- Do I still want this length of CD?
- Will I need the money during the new term?
- Could a savings account provide better liquidity?
- Are there better CD rates elsewhere?
- Do I have upcoming expenses that require cash?
- Would splitting the money across several maturity dates make more sense?
Your financial situation may have changed since you opened the original CD.
Read: How to Save Money Without A Savings Account
What Can You Do With a CD After It Matures?
You don’t have to put the money back into another CD. Once your CD matures, you can consider several options.
Move the money to a savings account
A savings account may provide easier access to the money. This can make sense if you’re building or replenishing an emergency fund or expect to need the cash soon.
The tradeoff is that the savings account’s interest rate may be lower or variable compared with a fixed-rate CD.
Open another CD
If you still want predictable returns and don’t need immediate access to the money, another CD may make sense.
Compare:
- APY
- Term
- Minimum deposit
- Early-withdrawal penalty
- Renewal policy
- Grace period
- Interest payment options
Don’t automatically assume your existing bank has the best rate.
Use the money for a planned expense
A CD may have been created for a specific goal. You might use the matured funds for:
- A down payment
- Home improvements
- Tuition
- A vehicle
- A major purchase
- A business expense
- An upcoming tax payment
Using the money for its original purpose can be more sensible than automatically reinvesting it simply because the CD matured.
Build or replenish an emergency fund
If your emergency savings have fallen below your target, a maturing CD can be an opportunity to restore your cash reserves.
Unlike a CD, an accessible savings account can give you faster access to money when an unexpected expense appears.
Consider another investment
Depending on your financial goals, time horizon, and risk tolerance, you might decide that a CD no longer fits the role the money needs to play.
That could mean considering other investments or savings products. But unlike a bank CD, many investments can lose value. A higher potential return generally comes with different types of risk.
Read: Best SoFi Alternatives in 2026: Where to Compare Personal Loans
What Happens to CD Interest When It Matures?
Your CD’s interest treatment depends on how the account is structured. Some CDs pay interest periodically during the term. Others allow interest to remain in the CD and compound until maturity.
If interest has been credited and remains in the account, the amount available at maturity can include both the original deposit and accumulated interest, subject to the CD’s terms.
The tax treatment is a separate issue. For U.S. federal tax purposes, interest from CDs is generally taxable income. The IRS says interest that you receive, or that is credited to an account and can be withdrawn without substantial penalty, generally must be included in income. Certain longer-term CDs can also be subject to original issue discount rules.
A CD reaching maturity does not by itself make the entire principal taxable. Generally, interest income is relevant for federal income-tax purposes.
Do You Pay Taxes When a CD Matures?
The maturity date and the tax date aren’t always identical. For many ordinary CDs, interest is taxable in the year it is received or becomes available to you under the applicable tax rules.
The IRS generally requires financial institutions to report qualifying interest on Form 1099-INT.
Longer-term CDs can involve different tax accounting due to the original issue discount rules. The IRS specifically notes that CDs with maturities of more than one year may require that interest be included in income each year under those rules.
If your CD has unusual terms, substantial accrued interest, or a long maturity, review the tax reporting information provided by the institution or consult a tax professional.
What If You Withdraw Your CD Before Maturity?
Maturity is important because withdrawing money before the maturity date can trigger an early-withdrawal penalty. The exact penalty depends on the CD’s terms.
The penalty may be expressed as several months’ interest or by another formula specified in the account agreement.
That’s different from withdrawing money during an applicable post-maturity grace period. A qualifying grace period can allow you to make changes without an early-withdrawal penalty.
Before withdrawing early, check the penalty rather than assuming you’ll lose a small portion of your interest.
Read: Best Business Savings Accounts: Top Options for Your Company
A Simple CD Maturity Checklist
About a month before maturity, review the following:
- Confirm the maturity date
- Check the current CD balance
- Calculate how much interest you’ve earned
- Read the maturity notice
- Confirm whether the CD automatically renews
- Find out the length of the grace period
- Check the renewal APY
- Compare other CD rates
- Consider your upcoming cash needs
- Check your total FDIC or NCUA-covered deposits
- Decide whether to withdraw, transfer, or renew
- Set a reminder before the grace period expires
This small amount of preparation can prevent your money from being locked into a new term simply because you missed a deadline.
How Beem Can Help You Think About the Cash-Flow Side
A CD is designed to reward you for leaving money untouched for a specified period. But life doesn’t always follow the timeline you set when you opened the account. When a CD matures, having a clear plan for the money can help you avoid making a rushed decision.
If you’re using the matured funds for a planned expense, you can move them where they’re needed. If you’re keeping them as savings, you can compare available options before locking them up again.
For eligible Beem users, Everdraft™ is a separate short-term cash-flow tool that provides access to up to $1,000, subject to eligibility and account activity. It isn’t a replacement for a CD, savings account, or emergency fund, and it doesn’t change the terms of an existing CD. Download the app now.
The bigger principle is simple: money that’s meant for a long-term savings goal and money that’s needed for immediate expenses may need different homes.
The Bottom Line
When a certificate of deposit matures, you generally have a choice about what happens next.
You can withdraw the money, move it to another account, reinvest it in a new CD, or set it to renew automatically if your account is structured that way. The key is not to let the decision happen accidentally.
Check the maturity date, understand your grace period, compare the new APY with alternatives, consider when you’ll need the money, and review your deposit-insurance coverage if you’re keeping substantial balances at the same institution.
A CD can be a useful savings tool, but its maturity date is more than an administrative milestone. It’s an opportunity to reassess whether the way your money is saved still matches your goals.
Read: High-Yield Savings Account for Non-Profits: How to Grow Your Reserve Funds Smarter
FAQs: What Happens When a Certificate of Deposit Matures
1. What happens when a certificate of deposit matures?
When a CD matures, its original term ends. Depending on the account, you can generally withdraw or transfer the money, reinvest it in another CD, or allow the bank to renew it automatically. The specific options and deadlines depend on the CD agreement.
2. How long is the grace period after a CD matures?
There is no universal grace period. Many banks provide roughly seven to 10 days, but the exact period varies by institution and product. If a CD automatically renews, the institution must disclose whether it provides a grace period and how long it lasts.
3. Does a CD automatically renew when it matures?
Some CDs automatically renew, while others don’t. If automatic renewal applies, the new CD may have a different interest rate from the original CD. Check your maturity notice and account agreement before the maturity date.
4. Is CD interest taxable when the CD matures?
Generally, CD interest is taxable income under federal tax rules. The exact timing of taxation depends on how the CD pays, or credits interest, and longer-term CDs may be subject to additional original issue discount rules. Financial institutions generally report qualifying interest on Form 1099-INT.
5. Are CDs FDIC insured?
CDs issued by an FDIC-insured bank are generally covered by FDIC deposit insurance, subject to the applicable limits. The standard limit is $250,000 per depositor, per insured bank, per ownership category, and the calculation includes principal and accrued interest. Credit union CDs are generally insured separately by the NCUA under its applicable rules.
