Withdrawing CDs before the maturity date?

Question

If I withdraw the money from a CD before the maturity date, is there any penalty for doing so? Also, do I get the interest for part of the term OR do I just get the principal back?

Answer 1

Call your bank.  Some banks dock you three months interest, even if the CD hasn't been there for three months, then recalculate the interest based on ordinary savings rates.

You should not buy CDs from a bank.  You should buy them through a brokerage account.  The CDs bought  this way are negotiable and are still insured.  Bank CDs are a rip off.  They usually pay lower rates, too.

Answer 2

Most banks will charge you early withdraw fees usually equal to 3 to months interest, depending on the maturity length of the CD. Check with your bank holding the CD before withdrawing.

Answer 3

In the US, the usual penalty is 3 months interest.  But sometimes you can borrow the money instead, using the CD as collateral, and be better off.  Since the bank has the CD, they might give you a really low rate on the borrowed money.