Can I take my money out of a CD investment before it reaches maturity? Are there any penalties?
Yes they may be cashed in early and yes there are penalties. Banks generally allow for a penalty because the rate of interest being paid was based, in part, on the time the money was supposed to be on deposit. When you cash a CD in early, you are breaking that promise and should expect to pay a penalty. The amounts can vary.
If the account has been open a week or more the bank has some flexibility and could waive this penalty. That can happen based on the overall relationship or the reason for the withdrawal. If the deposit is less than a week old there are few exceptions allowed by law as to waiving the penalty. The death of the depositor is one of these exceptions.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
Yes they may be cashed in early and yes there are penalties. Banks generally allow for a penalty because the rate of interest being paid was based, in part, on the time the money was supposed to be on deposit. When you cash a CD in early, you are breaking that promise and should expect to pay a penalty. The amounts can vary.