CD renewal happens at the end of your term during a short window called the grace period. During this time, you decide whether to add or withdraw funds or let your CD renew.
Understanding how CD renewal works can help you lock in a rate that fits your goals and avoid fees. Let's take a deeper look.
What happens when your CD matures?
When a CD matures, the term ends. You can withdraw your initial deposit and any interest earned without penalty. During the grace period, typically 7–10 calendar days, you choose from three options: withdraw or add funds, renew your CD for a new term or move the money elsewhere. If you don’t act within the grace period, most banks automatically process a CD renewal for the same or a similar term.
How CD renewal works?
Many banks renew your CD once the grace period ends. If your bank does not renew automatically, you may need to contact the bank or visit online banking to select your term and confirm the rate. Even when renewal is automatic, make sure you review the new Annual Percentage Yield (APY) and term length. Rates can change with market conditions.
Reasons to renew your CD
- You don’t need the funds soon: If you won’t need access in the near term, CD renewal can keep your savings working with minimal effort.
- Rates have improved: If current CD rates are higher than your original term, renewing your CD can lock in a better APY.
- You want a simple path forward: Automatic CD renewal helps you continue earning interest without extra steps.
- You want consistent growth: Letting your CD renew keeps interest compounding rather than moving the money to a low-yield account.
Reasons to skip CD renewal
- Rates have fallen: If current rates are lower, you may prefer a shorter term or a different savings option.
- You’ll need the money soon: CDs charge early withdrawal penalties, so renewing may limit flexibility if a big expense is coming up.
- You want more access: If liquidity matters, a high-yield savings account or a no penalty CD could fit better than a standard cd renewal.
Tips to prepare for your next CD renewal
- Note your dates: Mark the maturity date and grace period window so you can compare rates and choose a term in time.
- Check current rates before you renew: Rates change. Confirm the APY and term you’ll get at cd renewal.
- Right-size your term: Match the renewal term to your timeline—shorter if you expect to need funds, longer if you want to lock a rate.
- Consider partial withdrawals: If your bank allows it during the grace period, you can withdraw some funds and renew a CD with the remaining balance.
Consider a CD ladder
If you’re on the fence about CD renewal because you want both yield and access, you can build a CD ladder during the grace period. Split your balance across multiple CDs with staggered maturities. For instance, you could choose options between 6, 12, 18 and 24 months. This approach gives you regular maturity points to capture rising rates while keeping part of your savings accessible without penalties.
Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.
