How to Cash a Certificate of Deposit

Banks and other licensed financial institutions can offer certificate of deposits.
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A certificate of deposit – or CD issued by a bank or other financial institution – can be a safe, convenient and beneficial investment, as long as you let it fully mature. A CD is nothing more than a deposit that acquires a higher percentage of interest than the interest rates of normal savings accounts over a preset period. Until the CD reaches maturity, the cash it represents is unavailable to you, unless you pay an early withdrawal penalty. On the CD's maturity date, you have several options. You can reinvest and roll it over again, deposit the money into your checking or savings account or simply cash it out when it expires.

Step 1

Wait until you receive a letter from your bank or other financial institution regarding the CD's maturity. This normally occurs anywhere between two to three weeks before it reaches its maturity date. This letter informs you that the CD is about to run out and explains your options. If you do nothing, the CD automatically rolls over for the same period as your original investment.

Step 2

Take the actual certificate you received when you made the investment and your photo I.D. to the bank that holds the CD on your behalf the day it matures. You must do this within the period specified in the letter you received from the bank or else you will not be able to receive the cash from your CD without a significant monetary penalty being imposed.

Step 3

Speak with an employee outside of the cashier's counter and let the bank's representative know that you want to cash a CD. That person will direct you to an individual who can assist you.

Step 4

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

Step 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.

Step 6

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

Tip

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.

Warning

Early withdrawal penalties can cost you interest and part of your original investment, which defeats the purpose of investing in one.

Read the terms of your particular certificate of deposit before you decide to close out the CD prematurely.

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