What to do when your Certificate of Deposit (CD) matures

Know when your Certificate of Deposit matures. Plan ahead for your finances with a clear understanding of its maturity period.
CD Maturity Period
3 min

Once your certificate of deposit (CD) matures, you have a brief window to decide the next step. This marks the time you can access your deposit and the earned interest, giving you the opportunity to either renew the CD, switch to another bank’s CD, or utilise the funds elsewhere.

However, premature withdrawal can lead to penalties. Hence, it is important to understand what happens when you withdraw from your fixed deposit prematurely to help you make informed choices about your finances.

Know your CD maturity date

Knowing your CD maturity date is essential for effective financial planning. To keep track of the date, you can refer to the documentation provided by your bank or financial institution, such as the CD certificate or account statements, where the maturity date is clearly stated. Many banks also offer online banking or mobile apps where you can view your account details, including the certificate of deposit maturity period. Additionally, setting up reminders on your calendar or phone can be beneficial, notifying you well in advance.

If you are looking for a safe investment option, you can consider fixed deposit. They offer guaranteed returns and a fixed interest rate throughout your investment tenure.

What happens when a CD matures

After your certificate of deposit maturity period ends, you will receive the maturity value. This includes the initial amount you invested, along with the interest earned during this period. The longer the term of the CD, the higher your interest amount will be.

The maturity value of a CD is determined by the initial deposit amount, the CD's interest rate, the duration of the term, and how the interest is compounded. When interest is compounded, the accrued interest is added to the CD's balance and this new amount starts earning interest as well.

Know your CD grace period

A grace period is a brief window during which you can withdraw the money from your CD after it matures. If you do not withdraw the amount during this period, the bank will automatically renew your CD with the same or similar term period as the original CD. The grace period for CDs in India typically ranges from a few days to around two weeks after the certificate of deposit maturity period ends. Ideally, you must decide what you want to do with the CD ahead of its maturity date.

Also read: How to claim fixed deposit after death

What is CD renewal

If you do not withdraw funds after the certificate of deposit maturity period ends, certain CDs are set up to automatically renew after the grace period. While this is typically for the same term, the interest rate may be higher or lower. It is important to take note of your CD’s maturity date so you can compare rates and terms before you allow your CD to renew automatically. To identify if your CD is eligible for automatic renewal, review the details on the deposit agreement or terms and conditions of your bank or financial institution.

For even more flexibility and control over your funds, consider exploring fixed deposit options with varying tenures and withdrawal options.

Decide what to do with the money in your matured CD

Once your certificate of deposit maturity period ends and you are within the grace period, you have a few options for what to do with the CD money:

  • Close the CD, withdraw the cash and use the money elsewhere
  • Let the CD automatically renew for the same term
  • Let it roll over into a new CD with a different term and APY
  • Put the money in a high-yield savings account
  • Use the money for other investments

Know what happens if you do not take action

If you take no action, the bank may automatically renew your CD for the same term and APY rate as that of your original CD. However, there are some risks involved when you do not take any action following the maturity of your CD:

  • You could get stuck with a longer term than you wanted
  • You could miss out on higher rates

Figure out your overall financial goals for this money

Here are some questions to consider when your certificate of deposit maturity period ends:

  • Are the interest rates higher or lower compared to when you initially purchased the CD?
    You might find a CD with a higher APY from another bank or through a high-yield online savings account but without the same time constraints.
  • Have your goals changed?
    You may want to allocate them toward increasing your emergency funds, savings for retirement, or adding to your down payment savings for a home.
  • Are you satisfied with the current APYs offered on CDs?
    If you are willing to take on more risks with this fund, you may consider allocating some of the money towards investments with higher risk but the potential for greater returns.

Build a CD ladder

If you value the security and reliability of this savings method and find the APYs satisfactory, another possibility following your certificate of deposit maturity period is to expand your investment in CDs by building a CD ladder. Building a CD ladder is a strategic approach to maximising returns while maintaining liquidity in your investment portfolio. It involves leveraging the maturity dates of multiple CDs, typically with varying terms and interest rates. By spreading investments across CDs with different maturity dates, you can access funds periodically while benefiting from potentially higher interest rates on longer-term CDs. This strategy offers a balance between earning competitive returns and maintaining flexibility for financial needs.

If you are looking for safe investment option, then you can consider investing Bajaj Finance Fixed Deposit. With a top-tier AAA rating from financial agencies like CRISIL and ICRA, they offer one of the highest returns, up to 8.85% p.a.

Bottom line

If you are nearing your certificate of deposit maturity period, it is advisable to start planning your next steps regarding the funds. While you have the option to let the CD automatically renew for the same term and annual percentage yield, it is also important to note the potential risks involved, such as lower APY or a longer term than desired. Take the time to thoroughly understand your alternatives and make an informed decision that aligns with your overall savings strategy.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

Systematic Investment Plan Calculator

Fixed Deposit calculator

SDP calculator

Gratuity Calculator

Lumpsum Calculator

Step Up SIP Calculator

Sukanya Samriddhi Yojana Calculator

Public Provident Fund Calculator

Brokerage Calculator

MF calculator

EPF Calculator

RD Calculator

Frequently asked questions

How long does it take to cash out a CD?

Upon maturity, you get a grace period, typically of around 10-14 days, during which you can withdraw your principal and interest amount. If you choose to cash out your CD prematurely, you will be liable to pay an early withdrawal penalty.

Is it possible to lose money on a CD?

As CDs offer guaranteed interest, you do not lose money. However, you could still lose a portion of your CD for reasons such as early withdrawal penalties, interest rate fluctuations, and CD’s interest rate being lower than the inflation rate.

Is CD laddering worth it?

A CD ladder is worth it because it is a smart financial strategy that enables a stable flow of savings over time. It lets you capitalise on strong rates as they rise in the market instead of waiting for your funds to mature in a single CD.


As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.