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CD Maturity: Understanding Your Options & Next Steps

Certificates of deposit (CDs) are famous for allowing you to earn a fixed rate of interest in exchange for keeping your money in the account for a set period of time. That period of time ends once the CD matures. However, knowing what to do after that can be tricky. We'll walk you through what happens when a CD matures so that you can be prepared to do what's best with your money.

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CD Maturity: Understanding Your Options & Next Steps

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CD Maturity: Understanding Your Options & Next Steps

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Up to $400 CD Maturity: Understanding Your Options & Next Steps New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. CD Maturity: Understanding Your Options & Next Steps

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Earn a $50 or $400 bonus with eligible direct deposit1 New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/2026. Full terms at <a href="https://www.sofi.com/banking/" >sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. and up to 4.00% APY2 Earn up to 4.00% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.30% APY as of 3/31/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at <a href="https://www.sofi.com/banking/#2">sofi.com/banking#2</a>. SoFi Bank, N.A. Member FDIC. on your money
Limited-Time Offer: +0.70% Boost on Savings APY to up to 4.00% for up to 6 months on new accounts. Terms apply.2 Earn up to 4.00% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.30% APY as of 3/31/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at <a href="https://www.sofi.com/banking/#2">sofi.com/banking#2</a>. SoFi Bank, N.A. Member FDIC.
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Get your paycheck up to two days early with direct deposit4 Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.
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Key takeaways

Before your CD matures, your bank will inform you about your grace period, a multi-day timeframe where you can move the funds from your CD without penalty.
During the grace period, you can choose to renew your CD, move the funds to a different CD, or withdraw your money.
If you miss the deadline, your financial institution may choose to renew your CD for you, hold the funds without earning interest, or mail you a check for the amount that was held in the CD account.

What happens at the end of a CD account term?

Once your certificate of deposit is close to maturity, your bank, credit union, or financial advisor will send you a notification about your grace period. A grace period is a length of time, usually 7-10 days after your CD matures, when you can move the money kept in your CD without penalty.

During your grace period, you have a few options for how to handle the funds. (More on that below.) But you have to act quickly. A CD's grace period only lasts for a few days. If you miss it, your financial institution may automatically roll over the funds into a new CD on your behalf or withdraw them and write you a check for the amount earned. In some cases, the bank could also hold your funds in the account without paying interest.

What options do I have for my CD funds?

If you're looking to manage your CD funds during your grace period, you have a few options.

Renewing your CD: Renewing your CD involves locking your money in for the same amount of time as your last CD. However, this time, your interest rate may change. You'll likely be given a current market rate.
Choosing a different CD: Alternatively, you could also choose to roll your funds into a CD with a different maturity term. In this case, you'll also be given a new market rate.
Withdrawing the funds: Your last option is to withdraw the funds from the account. You might choose this route if you're looking to spend the money, put it into a savings account, or invest it in a different way,

What happens when a CD matures and you do nothing?

When you fail to act during your grace period, you essentially let your bank or credit union take the lead on what to do with your money. Every financial institution has a different policy on how to handle matured funds from a CD, but they typically act in one of three ways.

Automatically renewing your CD
Holding the funds without paying interest
Withdrawing the funds and sending you a check

It's a good idea to read your account agreement to determine how your financial institution will handle it if you don't reach out to them during your grace period. However, in my opinion, it's even better to be proactive about managing your money by deciding where it should go right after the funds mature.

What is a CD ladder?

Many people invest their money using a CD laddering strategy. This strategy involves investing a lump sum of money by spreading it across a few different CDs with varying maturity terms. For example, if you have $30,000 to invest, you could put $5,000 in a CD with each of the following maturity terms: 6 months, 1 year, 2 years, 3 years, 4 years, and 5 years.

The advantage here is that you're able to lock in higher interest rates with the longer-term CDs while still maintaining some flexibility with the shorter-term CDs. When each CD matures, you'll have the option to renew it and reinvest the funds, including any interest you've earned, or to withdraw the money and use it as needed.

The mix of promising returns and versatility is why some people decide to build a CD ladder emergency fund. However, be aware that this strategy doesn't have the same level of liquidity as keeping funds in a savings account. You may not be able to access your money exactly when you need it, at least not without paying a penalty, with a CD.

No-penalty CD or savings account — which is better?

Often, when people consider their investing options, they compare a no-penalty CD and a high-yield savings account (HYSA). As the names suggest, no-penalty CDs allow you to earn a fixed rate of return on your investment without worrying about paying an early withdrawal penalty if you need to move your money early. Meanwhile, HYSAs offer higher-than-average yields combined with the flexibility of a savings account.

There's no one-size-fits-all answer to which is the better choice. Most of the time, the decision comes down to figuring out how often you'll need to access the money and researching the annual percentage yield (APY). CDs that have an early withdrawal penalty sometimes have a higher APY than a no-penalty CD or HYSA.

No-penalty CDs still work best if you leave your investment in place for the entire maturity term. So, if you think you need ongoing access to your money, an HYSA might be a better choice. On the other hand, no-penalty CDs typically offer a guaranteed rate of return while an HYSA is variable, so if you want the security of knowing how much you'll make on your investment, a no-penalty CD could be a smart option.

The APY on both products will vary according to market rates, so be sure to look into what's available before making your final decision.

CD Maturity: Understanding Your Options & Next Steps

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CD Maturity: Understanding Your Options & Next Steps

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CD Maturity: Understanding Your Options & Next Steps

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Limited-Time Offer: Earn a $50 or $400 bonus with eligible direct deposit and up to 4.00% APY on Savings (3.30% APY1 New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/2026. Full terms at <a href="https://www.sofi.com/banking/" >sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. with +0.70% APY Boost) for up to 6 Months on new accounts. Terms Apply.2 Earn up to 4.00% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.30% APY as of 3/31/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at <a href="https://www.sofi.com/banking/#2">sofi.com/banking#2</a>. SoFi Bank, N.A. Member FDIC. FDIC Insured.5 SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/sidpterms">SoFi.com/banking/fdic/sidpterms</a>. See list of participating banks at <a href="http://sofi.com/banking/fdic/participatingbanks">SoFi.com/banking/fdic/participatingbanks</a>.

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FAQs

Will my CD automatically renew?

It depends. Your financial institution's policy may allow it to automatically renew your CD if you don't reach out during your grace period. Otherwise, you'll have to instruct your bank or credit union to renew your CD.

Do you pay taxes on a CD when it matures?

The interest you earn from CDs is taxable and must be reported to the IRS. However, rather than paying when the CD matures, you are responsible for reporting the amount of interest that is made available to you each year.

Note: CD interest is taxed as ordinary income, not capital gains.

What is the downside to a CD account?

The major downside of a CD is its lack of liquidity. If you need to access the funds in your CD before they mature, you'll likely be faced with paying an early withdrawal penalty. This penalty is usually a few days' or months' worth of interest, and it can eat away at your returns.

Bottom line

Knowing what happens when a CD matures can give you a lot more control over your money. If you're prepared when your grace period comes around and know how you want your funds to be distributed, you'll get better use out of them than if you had let your bank or credit union take the lead.

With that in mind, it's smart to know for certain when your CD's maturity date will arrive. Be sure to read your deposit account agreement to determine whether it's on the horizon or if you have more time to decide what you want to do with the money you've earned.

CD Maturity: Understanding Your Options & Next Steps

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CD Maturity: Understanding Your Options & Next Steps

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

CD Maturity: Understanding Your Options & Next Steps

AWARD WINNER Best Online Checking

High APY of up to 4.00% on Savings (3.30% APY1 New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/2026. Full terms at <a href="https://www.sofi.com/banking/" >sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. with +0.70% APY Boost) for up to 6 Months on new accounts. Terms Apply.2 Earn up to 4.00% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.30% APY as of 3/31/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at <a href="https://www.sofi.com/banking/#2">sofi.com/banking#2</a>. SoFi Bank, N.A. Member FDIC.

Paycheck access up to 2 days early with direct deposit4 Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

No monthly maintenance or overdraft fees3 We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a>.

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