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Key Takeaways
- Before a CD matures, you have a short window to decide what to do with your funds. Miss it, and your money may be locked into a low rate and a new term you don’t want.
- With Fed rate cuts on the way, it’s smart to research options before the deadline so you can make a proactive decision that works for you.
- Even if you want another new CD, you can almost always earn much more by choosing one of today’s best CD rates instead of accepting the bank’s rollover offer.
- Need flexibility instead? Move some or all of your CD balance into a top high-yield savings account for easy access and a solid return.
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The Costly CD Mistake That Can Lock You In to a Lousy Rate
Whenever a certificate of deposit (CD) nears its maturity date, you face a deadline to decide what happens with your funds. Take no action, and your bank will likely roll them into a new CD—a move that can hurt you in two ways.
First, rollover CDs rarely offer competitive rates. Banks typically default you into a single option, which often pays far less than the best CD yields available elsewhere.
Second, an automatic rollover may double your commitment. A 1-year CD could become two years, a 2-year CD could become four—locking up your money in a term that may not fit your goals. And if you need access before the CD ends, an early withdrawal penalty will apply.
The good news: You can sidestep this costly trap by planning ahead. Taking control before maturity lets you avoid being locked into a lousy CD rate and an unwanted term, and instead choose the option that best fits your needs.
4 Smart Steps To Take Before Your CD Renews
Step 1. Decide: A New CD or More Flexibility?
If you’re hesitant to lock into another CD because you might need access to your money soon, a high-yield savings account could be a better alternative. The best accounts right now pay 4–5%, offering a strong return with full access to your funds when you need them.
But with the Federal Reserve expected to cut interest rates more than once in the coming months, savings account yields will drop. That means today’s top 5% return isn’t likely to last, and all of the top accounts could be paying considerably in a few months.
That’s where a new CD comes in. If you don’t need immediate access to your funds, opening one of today’s top CDs guarantees the advertised annual percentage yield (APY) until maturity. No matter how many times the Fed lowers rates, your CD rate will be locked in.
Fed Rate Cuts Are Coming
According to the CME FedWatch Tool, markets are fully pricing in at least a 0.25% rate cut on Sept. 17, with a 68% chance of total cuts reaching 0.75% by December.
Step 2. Compare Your Bank’s Renewal Rate With Today’s Best CDs
When your bank or credit union notifies you about a maturing CD, they’ll show you the renewal option—with its set term and rate. But before you simply accept it, it pays to compare what’s available elsewhere.
See our list of the best nationwide CDs and compare the top rates. You’ll see the top APYs available right now and how rates stack up across different terms, so you can choose the CD that best fits your goals.
Warning
If your CD doesn’t mature for another month, don’t assume today’s advertised rates will still be available. With rates expected to fall soon, the APY you’re offered at maturity could be much lower. That’s why it’s crucial to plan ahead and take control, rather than letting your money automatically roll over.
Step 3. Beat the Deadline Before Automatic Renewal Kicks In
Several weeks before your CD matures, your bank or credit union will send instructions on how to direct your funds. You may get a reply form, an envelope, or directions for using online or phone banking.
If you’re undecided, the safest move is to tell the bank—before their deadline—to transfer your balance into a savings account, either at the same institution or one you’ve linked. That way, your money stays flexible and easy to move later, no matter what you decide. Even if you ultimately want another CD at the same bank, you can open it quickly with funds that were first parked in savings.
Missed the Deadline? Act Quickly
Most banks and credit unions give you a short grace period after a CD renews. If your funds have already rolled into a new certificate, you may still be able to reverse it—if you move fast. Grace periods usually last 5 to 10 days, though the exact window varies by institution.
Step 4. Plan Your Next CD Strategy To Maximize Earnings
If you’ve decided to open a new CD, act quickly to lock in the best rate for a term that fits your financial goals. With CD yields already slipping and multiple Fed cuts expected, moving sooner increases your odds of securing a higher APY.
Also, if your current CD won’t mature for another month or two, but you have extra funds allowing you to double-commit for a short time, consider opening a new CD now. That way, you may lock in a stronger rate than what’s likely to be available once your existing CD matures.
Pro Tip From Savvy CD Savers
Whenever you open a new CD, set a calendar reminder 1–2 months before maturity—helping you avoid auto-renewal and keeping your options open.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
Important
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
