How Do I Redeem a CD?

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Certificates of deposit are time deposit accounts and when a CD matures it enters a grace period during which you can close the account. In the past, CD account holders received an actual certificate when they opened the account and you had to present the certificate when you redeemed the CD. However, banks no longer issues certificates; you just need a valid form of identification to redeem your CD. You can take your CD proceeds in the form of a check or cash or have the funds electronically deposited into another account.

  • Review your CD time deposit agreement to see when your account matures and the length of the grace period. Typically, the grace period lasts for up to 10 days, but some banks have shorter grace periods. If you cannot find your agreement, call the bank to find out when the CD matures and the redemption deadline. If you do not redeem it within the grace period, a new CD term begins.

  • Go to the bank and show an account representative your time deposit agreement and a form of government issued ID, such as your driver's license or passport. Instruct the account representative to close the CD. Tell the banker whether you want the proceeds as cash, in a check or transferred to another account.

  • Check your withdrawal receipt and compare your cash or official check with the receipt to ensure that the banker gave you the correct amount of money. Keep your copy of the time deposit agreement for your records along with the withdrawal receipt.

Tips & Warnings

  • If you are the pay-on-death beneficiary on someone else's CD, you must follow the same steps to close the CD but you must also provide the bank with a certified copy of the account owner's death certificate. Funds held inside a POD account do not have to pass through probate, so the bank holding the CD can give you cash or a check without having to see any documentation related to the settlement of the account holder's estate.
  • Your bank normally does not credit interest to your CD until after the close of business on the day that the CD matures. Therefore, you actually have to wait until the day after the CD matures in order to make your closing withdrawal. If you try to redeem the CD before the interest has been credited, your bank will likely regard your withdrawal as a premature withdrawal and you will actually have to pay an interest penalty in order to access your money.

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