How to Cash a Certificate of Deposit

A certificate of deposit, or CD, can be a safe, convenient and beneficial investment. A CD is nothing more than a deposit that acquires a higher percentage of interest over a pre-specified amount of time than the interest rates of normal savings accounts. When the time for your certificate of deposit expires, you will given the option to reinvest your money (allow the CD to roll over), place the money into your checking or savings account or simply cash the CD out. Here is how to cash a CD.

Instructions

1. Wait until you receive a letter from your bank or other financial institution regarding the maturation of the CD. This normally occurs anywhere between 2 to 3 weeks before the maturation date. This letter will notify you that the CD is about to run out and also explain your options. If you do nothing, your CD will automatically roll over for the same amount of time as with your original investment.

2. Take the actual certificate you received when you made the investment and photo I.D. to the bank where your CD is held and do so on the day your CD matures. You must do this within the time period listed in the letter you received from the bank or else you will not be able to cash your CD without a significant monetary penalty being imposed.

3. Tell an employee outside of the cashier's counter that you want to cash a CD. That person will direct you to an individual who can assist you.

4. Listen carefully as the bank employee explains your options regarding your CD. You will be able to let your CD roll over or invest more money into the CD, take the money out of the CD and place it into a checking or savings account you have with that bank or simply cash out and close the CD.

5. Sign the necessary paperwork once you have made a decision regarding your CD. If you've chosen to cash your CD, you will most likely be given a check for the amount of money that was in your CD at the date it matured. A smaller institution may actually hand you the cash as soon as you close out the CD.

6. Take your check to the cashier's counter and cash it. This will officially close out the CD.

Tips & Warnings

• If you invested your money in a CD at a national chain bank location, you may be able to cash out your CD any of that bank's locations in the country. Contact your financial institution for more information.

• Cashing out a CD before the maturation date could cost you up to 50 percent of your original investment. Read over the terms of your particular certificate of deposit before you decide to close out the CD prematurely.