What options do you have once the Certificate matures?
Options at Maturity: When the CD matures, you have several choices:
Roll Over: You can choose to renew the CD for another term, often at the current market rate. This means your money continues to earn interest in a new fixed-rate CD.
Withdraw: You can take the money out of the CD and use it for your needs. However, if you withdraw before the CD’s maturity date, you might incur penalties and lose some of the interest you’ve earned.
Change Terms: Some banks allow you to change the term of the CD at maturity, providing flexibility in your investment strategy.
A fixed-rate CD offers stability and guaranteed returns. Your interest rate remains constant, protecting your savings from fluctuations in interest rates. However, it’s essential to carefully consider the term length because withdrawing funds before maturity can result in penalties. Fixed-rate CDs are suitable for individuals who want a low-risk, predictable way to grow their savings over a specific period.