CDs investment?

Question

Say you put your savings in a CDs investment for 7 months... if you don't redeem it after the expiration does the bank just automatically renew it for another 7 months? What happens if the CD reaches its expiration date and you do nothing?

Answer 1

If the CD expires after the 7 months, then your CD will automatically renew if you do nothing.  The bad thing is that the bank will renew at a lower interest rate, it is better if you go the the bank and talk to a representative to find  the best rate for you.  After the CD expires, banks offer a renewal period of anywhere from 7-14 days for you to renew for a longer or shorter period, you can also add money to the CD without penalty and withdraw money as well.

Answer 2

it usually rollover to the next period but it usually has an agreement in advance.

Answer 3

Depends on the bank. Some auto-roll it over & some don't. If they don't it stops earning interest. CDs are not an investment as they never beat taxes & inflation for purchasing power.

Answer 4

Depends on laws and the banks themselves. Since you likely won't be receiving the same rate at expiration,you may want to move the money.Some banks will move it for you into the closest term CD at whatever rate was offered for the day the old CD expired. Some by law have to move it into a Cash account you have with them. If you "do nothing" with your money someone will do something with it for you.