Retired couple reviewing financial documents and planning options with advisor.

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.

When Your CD Matures: Beyond Simple Renewal

As your Certificate of Deposit (CD) nears its maturity date, it presents a crucial opportunity to re-evaluate your financial strategy. While automatically renewing your CD might seem like the path of least resistance, it's essential to consider if it truly aligns with your current financial goals and the prevailing economic landscape. Jacobs Financial Services encourages a proactive approach, ensuring your maturing funds work optimally for your retirement objectives.

Factors such as current interest rate environments, your liquidity needs, and the overall purpose of these funds—whether for income, safety, growth, or legacy planning—should guide your decision. Simply rolling over a CD without a thorough review might mean missing out on potentially better returns or more suitable financial products that could enhance your retirement security.

Exploring Alternatives to CD Renewal

The financial market offers a spectrum of alternatives that may provide more attractive benefits than a standard CD renewal. Understanding these options is key to making an informed decision that maximizes the potential of your maturing assets and supports your long-term financial well-being.

Beyond CDs, consider products like Multi-Year Guaranteed Annuities (MYGAs), which offer a fixed interest rate for a specified term, providing predictable growth. Another avenue is Fixed Indexed Annuities, which offer principal protection while linking potential interest gains to market performance without direct market exposure, providing a balance of safety and growth potential.

Understanding Your Retirement Goals

Your personal retirement goals are the cornerstone of any sound financial decision, especially when dealing with maturing assets like CDs. Identifying whether your primary need is consistent income, capital preservation, or long-term growth will dictate the most appropriate financial path forward.

For instance, if generating a reliable income stream is paramount, products offering steady payouts might be more suitable than a simple CD renewal. Conversely, if preserving your principal is the top priority, options that guarantee your initial investment while offering modest growth could be ideal. A comprehensive assessment of your individual circumstances ensures your financial choices actively contribute to achieving your desired retirement lifestyle.