Cashing Out a CD in April 2025? Avoid These 4 Costly Mistakes

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With CD yields still hovering in the 4.50% range, you really need to be picky when choosing where to put your cash.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Especially if you’re cashing out of an existing CD. If you don’t take action when a CD matures, your bank might quietly roll your funds into a new CD — locking them up again, potentially at a lower rate.If you’re cashing out a CD soon, avoid these top mistakes.1. Letting your bank auto-renew your CDMost CDs have something called a “grace period.” This is usually a seven- to 10-day window after the maturity date in which you can withdraw your money without penalty.Guess what happens if you miss this grace period? Banks typically auto-renew your CD — which may (or may not) be in your best interest.Even worse: Not all banks send you a reminder!While auto-renewal isn’t always bad, don’t assume that it’s the best option forward.What to do instead:Set a calendar reminder with your CD maturity date and the grace period window.Log in to your account the day it matures and choose “withdraw” or “close CD” (wording varies a little by bank).Make a quick decision about the next best place to put your money.If you want to open a new CD, be sure to shop around for the best available CD rates across all banks.A high-yield savings account (HYSA) is also a great short term storage option that won’t lock up your cash at all. Compare the best high-yield savings accounts of April 2025 (and start earning up to 4.40% on your cash).2. Letting their money sit idle after withdrawalA lot of people cash out their CD into a checking account, then think, “I’ll just wait a few days and figure out my next move later.” Then six months slip by and they’ve missed out on hundreds in earning potential. Don’t fall into this trap!A good practice is to withdraw money directly into an HYSA during the grace period. That way if you don’t have an immediate next step lined up, you’ll still be earning competitive interest on your cash.Whatever you do, don’t request a check withdrawal and then wait months to cash it. Or cash money out into a low-APY savings account earning pennies. Be proactive and make a plan for earning the most you can, as soon as you can.3. Reinvesting without rate shoppingIf your CD was earning 1.00% or 2.00% when you opened it, things have changed big time since then.As of April 2025, many high-yield CDs are paying well over 4.00% APY.Here’s a quick 12-month yield comparison, based on a balance of $20,000:APYInterest Earned (1 Year)1.50%$3004.00%$800Data source: Author’s calculations.Don’t just accept the rates offered by your current bank. Shop around, because there’s likely something better available elsewhere.Want to see the latest rates? Check out our list of the top CDs for April 2025.4. Cashing out early without understanding the penaltyIf your CD isn’t quite mature yet, resist the urge to cash out early. That’s because banks charge a penalty for doing so — which means you might forfeit three to 12 months’ worth of interest.Let’s say you’re earning 5.00% APY on a $10,000 CD and you withdraw three months early. You could lose $125 or more in penalties — which might wipe out a good chunk of your earnings.Make your exit countCashing out a CD shouldn’t be an afterthought. Stay ahead of the due date by researching the best options moving forward and making an action plan.And definitely don’t let your bank auto-renew your CD into a lower rate. There are way better options, and moving that money only takes a few minutes of your time.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

With CD yields still hovering in the 4.50% range, you really need to be picky when choosing where to put your cash.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Especially if you’re cashing out of an existing CD. If you don’t take action when a CD matures, your bank might quietly roll your funds into a new CD — locking them up again, potentially at a lower rate.

If you’re cashing out a CD soon, avoid these top mistakes.

1. Letting your bank auto-renew your CD

Most CDs have something called a “grace period.” This is usually a seven- to 10-day window after the maturity date in which you can withdraw your money without penalty.

Guess what happens if you miss this grace period? Banks typically auto-renew your CD — which may (or may not) be in your best interest.

Even worse: Not all banks send you a reminder!

While auto-renewal isn’t always bad, don’t assume that it’s the best option forward.

What to do instead:

• Set a calendar reminder with your CD maturity date and the grace period window.
• Log in to your account the day it matures and choose “withdraw” or “close CD” (wording varies a little by bank).
• Make a quick decision about the next best place to put your money.

If you want to open a new CD, be sure to shop around for the best available CD rates across all banks.

2. Letting their money sit idle after withdrawal

A lot of people cash out their CD into a checking account, then think, “I’ll just wait a few days and figure out my next move later.” Then six months slip by and they’ve missed out on hundreds in earning potential. Don’t fall into this trap!

A good practice is to withdraw money directly into an HYSA during the grace period. That way if you don’t have an immediate next step lined up, you’ll still be earning competitive interest on your cash.

Whatever you do, don’t request a check withdrawal and then wait months to cash it. Or cash money out into a low-APY savings account earning pennies. Be proactive and make a plan for earning the most you can, as soon as you can.

3. Reinvesting without rate shopping

If your CD was earning 1.00% or 2.00% when you opened it, things have changed big time since then.

As of April 2025, many high-yield CDs are paying well over 4.00% APY.

Here’s a quick 12-month yield comparison, based on a balance of $20,000:

Don’t just accept the rates offered by your current bank. Shop around, because there’s likely something better available elsewhere.

Want to see the latest rates? Check out our list of the top CDs for April 2025.

4. Cashing out early without understanding the penalty

If your CD isn’t quite mature yet, resist the urge to cash out early. That’s because banks charge a penalty for doing so — which means you might forfeit three to 12 months’ worth of interest.

Let’s say you’re earning 5.00% APY on a $10,000 CD and you withdraw three months early. You could lose $125 or more in penalties — which might wipe out a good chunk of your earnings.

Make your exit count

Cashing out a CD shouldn’t be an afterthought. Stay ahead of the due date by researching the best options moving forward and making an action plan.

And definitely don’t let your bank auto-renew your CD into a lower rate. There are way better options, and moving that money only takes a few minutes of your time.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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