Your CD Is Maturing. Now What?

Over the past few years, many retirees and those approaching retirement took advantage of some of the highest CD rates we’ve seen in years. If you locked in a one-, two-, or three-year CD, there’s a good chance it’s coming due soon.

When that happens, many people simply renew it without exploring their options. While that may seem like the easiest choice, it isn’t always the best one.

Before you roll your money into another CD, here are a few questions worth asking.

Are Today’s CD Rates Still as Attractive?

Interest rates change over time. The rate you received a few years ago may no longer be available today.

Before renewing, compare today’s rates and consider how long you’re willing to lock up your money. You may find that extending your term doesn’t provide much additional return, or that there are other guaranteed options worth considering.

What Do You Want This Money to Do?

Not every dollar in retirement has the same purpose.

Ask yourself:

• Is this money intended to generate income?
• Is it meant to stay safe and grow?
• Will you need access to it in the near future?
• Are you hoping to leave it to your family someday?

The answers can help determine whether another CD is the right fit or whether another strategy may better align with your goals.

Don’t Focus Only on the Interest Rate

The advertised rate is important, but it shouldn’t be the only factor in your decision.

You should also consider:

• How long your money will be committed
• Whether you may need access before the term ends
• How the interest is paid
• Whether the investment offers any additional benefits, such as guaranteed lifetime income options or opportunities for growth tied to a market index without risking your principal

Looking beyond the rate can help you make a more informed decision.

Explore All of Your Options

For some people, renewing a CD may still make perfect sense.

Others may benefit from exploring alternatives such as:

• A new CD with a different term
• A Multi-Year Guaranteed Annuity (MYGA), which offers a guaranteed interest rate for a set period
• A Fixed Indexed Annuity, which protects your principal while offering the potential for interest based on the performance of a market index, without directly investing in the market

Every situation is different. The right choice depends on your retirement goals, income needs, and overall financial picture.

Before You Renew

If your CD is maturing in the next few months, now is a great time to review your options before making a decision.

At Jacobs Financial Services, we help retirees and those nearing retirement understand the choices available so they can make informed decisions with confidence. Sometimes that means renewing a CD. Other times, another strategy may provide benefits that better fit a person’s retirement goals.

The important thing is making an informed decision rather than automatically rolling your CD into another term.

If you have a CD that will be maturing soon and would like a second opinion, we’d be happy to review your options with you and answer any questions you may have.