CD account set to mature soon? Here's where you should move your money.
If you opened a certificate of deposit (CD) account in late 2022 or sometime in 2023 or 2024, you likely locked in an elevated interest rate. With rates on these accounts exponentially higher than they had been in 2020 and 2021, savers were able to rely on these returns to offset the burden of inflation and higher borrowing costs.
But the economy savers face going into 2025 is markedly different from what many experienced when they opened their CD in recent years. This means that those with an account set to mature in the weeks or months ahead should start thinking about their plans for those funds now, before they potentially roll over into a lower-paying account. Fortunately, there are still some attractive alternatives for savers to research now. Below, we'll break down three of them.
Start by seeing what interest rate you could lock in with a long-term CD here now.
Where you should move your money after your CD account matures
While each saver's financial circumstances differ, the following three accounts are all worth exploring ahead of your current CD's maturity date:
Long-term CDs
Long-term CDs, which have terms maturing in 18 months or longer, still have competitive interest rates, even if they're not quite as high as some short-term CDs. With a long-term CD, you'll be able to lock in a rate of around 4.50% now – and keep it for years to come. This fixed rate will remain static even if the wider interest rate climate cools during its term. It's critical, however, to only deposit an amount that you can afford to keep locked away for the full CD term. If you deposit too much money you may have to pay an early withdrawal penalty to reopen the account. That said, this is a secure and reliable way to continue earning elevated rates for multiple years.
Get started with a long-term CD online today.
High-yield savings accounts
If you shop around and consider an online bank, you may be able to find a high-yield savings account with an interest rate even higher than that tied to some top CDs. By moving your funds into one of these accounts instead, you won't need to worry about any early withdrawal penalties since it functions the same way a traditional savings account does, albeit with that higher interest rate. Still, rates on these accounts are variable and subject to move up or down as the interest rate climate evolves. To get the most value out of the account, then, it behooves savers to open one quickly, while returns are still elevated.
Start earning more on your money with a high-yield savings account now.
Money market accounts
What if you want the flexibility and elevated interest rates that a high-yield savings account comes with and the ability to do other things, like write checks and pay bills? Then a money market account may be a smart place for your maturing CD funds. These accounts, on the surface, act like other savings accounts but they come with higher rates than a traditional savings account, for example, which has an average rate of just 0.43%. These account types do require a minimum balance, however, but if you're already accustomed to leaving your funds untouched in a CD account, it could be a seamless transition.
The bottom line
Long-term CDs, high-yield savings and money market accounts are all viable alternatives worth exploring in advance of your CD account maturity date. It's critical to explore these options now, however, before your account matures. You'll have a limited grace period to move these funds before they automatically rollover, at which point you may have to pay the penalty to regain access. So start researching these options now – and be ready to move your current CD funds into one or more of them when your account finally matures.
