Can You Automatically Roll Over a CD When the Term Expires?

When you take out a certificate of deposit (CD), you agree to leave your money in a particular account for a given length of time. This could be a few months or a few years. When this length of time is up, your CD will mature and your money will be released back to you along with the interest it has accrued. At this point, your CD provider will write to you to outline your options.

In general, at this point, you can either withdraw the funds or let them roll over into a new CD. Each bank and credit union has different rules, but in most cases, you don’t need to do anything to roll over your CD. Just make sure you know the rules that apply to your CDs and make sure you check the rate that you will be paid for the new CD because it could be lower than the previous one.

How To Roll Over a CD

For most CDs, you don’t need to do anything to have them roll over into a new CD of a similar length—most CDs held with most banks and building societies will automatically roll over if you do nothing. 

Each bank, credit union, and other CD provider has its own rules when it comes to CD maturities. When your CD is close to maturing, your provider should write to you and explain your options. Typically, they will offer you three options:

• Transfer the funds into another account at that bank. Options include a savings, checking, or money market account.
• Withdraw the proceeds. They can be transferred to an external bank account or mailed to you in a paper check. 
• Roll over the CD into a new CD at that bank. Generally, this would be into a CD that most closely matches the term of your maturing CD. For example, if you have a one-year certificate concluding, they would likely roll your balance into a new one-year CD.

For most CDs, the third option is the default one: If you do nothing, your CD will roll over into a new one that matches the term of the old one. You should check with your provider as to what their rules are, however, because each provider sets their own.

Finding the Best CD Rates

Though most CDs will roll over if you do nothing when they reach maturity, that doesn’t necessarily mean that the terms of the CD will be the same. Your bank will usually put your money into another CD of the same length as the CD that just matured. For example, if your six-month CD is maturing, you may have a 10-day window of time after maturity to provide instructions to your bank. If you don't provide new instructions, your bank may put the money into another six-month CD. 

That doesn’t necessarily mean you’ll earn the same rate as before, though. When a CD rolls over, this is equivalent to the previous CD ending and a new one beginning. The interest rate your provider pays on new CDs might have changed since you took yours out and if it rolls over, you will be paid the new rate. This might be more or less than you earned on the previous CD. 

If you want to maximize the return on your CDs, pay attention when your CDs reach maturity and try to find the best possible rate. The interest rates on CDs depend on a variety of factors, some of which are beyond the control of individual institutions (such as the prime rate and the Federal Reserve rate). There is a wide variation in the amount that each provider will pay, however, so shopping around for the best deal is as important when you roll over your CD as it is when you first take it out. 

The Bottom Line

When a CD reaches maturity, your bank or credit union should write to you to outline your options. Typically, you will be given a short window in which to withdraw your funds. If you do nothing, your CD will likely roll over into a new CD. 

The term length of your new CD will normally be similar to your previous one, but the interest rate may be different. Your bank or credit union will pay you the same interest rate as new CD customers and this rate might be lower or higher than your previous rate. If you want to make sure that your CD is paying the highest possible rates, you should shop around each time your CD matures.