How to Cash Out a CD Investment

Cashing out a CD may come with penalties if it's done before maturity.

A certificate of deposit is an investment account offered by financial institutions that pays a higher rate of interest than a regular savings account, with the restriction that you must keep your funds invested for a specified period of time. CDs come in two types: renewable CDs and single-maturity CDs. A renewable CD automatically renews at the maturity date for the same term again but at the current interest rate that's being offered. During a period following the maturity date, you can cash out the renewable CD with no penalty. Single-maturity CDs do not automatically roll over and stop earning interest at maturity.

Things You'll Need

• CD paperwork from when it was opened

Instructions

1. Check the documents issued when you opened your CD account to determine the maturity date. If you cannot find your original documents, visit the financial institution where you opened the account and speak to a representative to get the information.

2. Decide whether you can wait for the maturity date to cash out the CD. If you have a single-maturity CD that has not yet reached the maturity date, or a renewable CD that hasn't reached the renewal option period, you will have to pay penalties for cashing out. There is an exception if you can prove you have a life circumstance that meets the institution's allowances for early withdrawal from CDs. Examples are the purchase of a primary residence or certain financial hardships.

3. Visit the financial institution that holds your CD and ask to speak with a representative who can help you cash out your CD. If you can, go on a date when you can avoid paying early-withdrawal penalties for a renewable or single-maturity CD, as described in Step 2.

4. Provide the representative with your account information and a form of personal identification. If you have an allowable life circumstance for early withdrawal, bring the necessary documentation to prove it.

5. Sign the withdrawal paperwork. The representative will process a payout based on the financial institution's options. For example, some financial institutions may offer cash conversion, a cashier's check or a wire transfer.

References

• Mortgage Loan: CD Rates
• Chase Bank: Account Rules and Regulations