A CD that has matured stops earning interest and needs your decision

When a certificate of deposit (CD) reaches its maturity date, the bank stops paying you interest on that money. The funds sit in your account — usually still earning nothing — until you tell the bank what to do with them. You have several choices: move the money to a savings account, open a new CD, withdraw it entirely, or let the bank automatically roll it into a new CD on the same terms. The bank will tell you the maturity date when you open the CD, and they typically send a notice 30 days before that date arrives.

Understanding what happens at maturity matters because your money stops working for you the moment the CD ends. If you do nothing, the bank may automatically renew your CD at a rate that is lower than what you could find elsewhere. If you act during the grace period after maturity, you can move your money without any penalty — something you cannot do before the maturity date.

Key Takeaways

  • A CD stops earning its advertised interest rate on the maturity date, and your money sits without earning anything until you act.
  • Banks usually send a notice 30 days before maturity, and you have a window of time (often 7 to 10 days after maturity) to decide what happens next.
  • If you do nothing, many banks automatically roll your CD into a new one with the current rate — which may be higher or lower than your original rate.
  • Withdrawing money before the maturity date usually costs you a penalty, but withdrawing after maturity does not.
  • Moving your money to a different bank or account type after maturity gives you a chance to compare rates and find a better option.

What happens on the maturity date

On the day your CD matures, two things stop: the bank stops paying you interest, and the CD contract ends. Your principal — the money you originally deposited — remains yours and stays in the account. However, it no longer earns the rate you agreed to when you opened the CD.

The bank will not automatically move your money or close the account. Instead, it sits in a holding state. Some banks move matured CD funds into a linked savings account temporarily; others leave them in the CD account earning nothing. Either way, you are not earning interest during this time, so acting quickly matters if rates have risen.

The grace period and automatic renewal

Most banks give you a grace period after maturity — typically 7 to 10 days — during which you can withdraw your money without penalty. This is different from early withdrawal, which normally costs you interest. After maturity, the penalty no longer applies because the contract has ended.

If you do not act during the grace period, many banks automatically roll your CD into a new one using the same term length and the current interest rate. This is called automatic renewal. If rates have dropped since you opened your original CD, your new rate will be lower. If rates have risen, you will earn more — but you could earn even more by shopping around at other banks first.

Some banks allow you to opt out of automatic renewal when you open the CD. If you did not, you can usually call or visit online to stop the renewal before the grace period ends. Check your CD agreement or call your bank to find out whether opting out is still possible after the CD has already matured.

Early withdrawal penalties do not explore after maturity

One of the main reasons people hesitate to touch a CD is fear of the early withdrawal penalty. This penalty applies only if you withdraw money before the maturity date. Once the CD has matured, the penalty no longer exists — you can withdraw all your money without losing any interest you have already earned.

The size of an early withdrawal penalty varies by bank and by CD term. A 3-month CD might have a smaller penalty than a 5-year CD. Your bank statement or CD agreement will show the exact penalty amount. But again, this only matters if you withdraw before maturity. After maturity, you are free to move or withdraw your money without any cost to you.

Comparing your options when a CD matures

When you receive the maturity notice, take time to compare what is available. Current CD rates change constantly, and the rate your bank is offering for a new CD may not be the best rate available. You can check rates at other banks, credit unions, and online banks without opening an account.

If your current bank's rate is competitive and you want to stay put, renewing with them is straightforward — you can often do it online or by phone. If another bank is offering a higher rate, you can withdraw your matured CD and move the money there. Some banks even offer a brief window where they will match a competitor's rate to keep your business, though you usually have to ask.

You also have the option to move the money to a regular savings account, a money market account, or another product entirely. A savings account is more flexible — you can withdraw money anytime without penalty — but it typically earns less interest than a CD.

What to do if you miss the grace period

If the grace period passes and your bank has already renewed your CD automatically, you still have options. You can withdraw the money from the new CD, but now you will face an early withdrawal penalty because the new CD is active. The penalty will be based on the new CD's terms, not the original one.

To avoid this, contact your bank as soon as you realize the renewal happened. Some banks will reverse an automatic renewal if you ask within a few days, treating it as if it never occurred. This is not may provide, but it is worth asking — the worst they can say is no. If they will not reverse it, you can still withdraw the funds and accept the penalty, then move the remaining money to a better rate elsewhere.

Moving a matured CD to another bank

After maturity, you can move your money to a CD at a different bank without any penalty or tax consequence. straightforward withdraw the funds from your matured CD and deposit them into a new CD elsewhere. There is no special form or process — it is just a regular bank transfer.

If you are moving a large amount, ask the new bank whether they offer any promotional rates for new customers. Some banks offer higher rates for the first CD you open with them, or for deposits above a certain amount. These promotions can add up to real money over the CD term. You can also ask your current bank whether they will match a competitor's rate to keep your business.

Frequently Asked Questions

Can I withdraw my money after the maturity date without a penalty?

Yes. Once a CD has matured, you can withdraw your principal and any interest you have earned without facing an early withdrawal penalty. The penalty only applies if you withdraw before the maturity date. After maturity, the contract has ended and you are free to move or withdraw your money.

What happens if I do nothing when my CD matures?

Most banks automatically roll your CD into a new one with the same term length and the current interest rate. This happens during a grace period, usually 7 to 10 days after maturity. If you do not want this, contact your bank during that window to stop the renewal or withdraw your money instead.

Is the interest I earned on my CD taxable?

Yes. The interest a CD earns is taxable income in the year it is credited to your account. Your bank will send you a 1099-INT form showing how much interest you earned. You report this on your tax return. This is true whether you withdraw the money or let it roll into a new CD.

Can I move my matured CD to a different bank?

Yes. After maturity, you can withdraw your money and open a new CD at any other bank without penalty. There is no special process — just withdraw from your current bank and deposit at the new one. This is a good time to compare rates and find a bank offering better terms.

What if my bank's new rate is lower than my original rate?

If automatic renewal has already happened, you can withdraw the new CD during its grace period without penalty. You can then move the money to a bank offering a higher rate, or keep it in a savings account while you wait to see if rates rise. If you catch it before renewal, you can stop the automatic renewal and shop around first.