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What to do if your CD matures this September
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While decades-high inflation and elevated interest rates have burdened borrowers in recent years, they resulted in exponentially higher returns for savers. From high-yield savings accounts to certificates of deposit (CD) accounts to even high-yield checking accounts, savers were positioned to earn interest rates many times higher than they could have secured just a few years earlier.
But the interest rate environment is changing once again.
Now, inflation has cooled significantly, dropping for the fourth consecutive month in July. A cut to the federal funds rate, which has a strong influence on what rates lenders offer savers, is expected to be cut in September. Additional reductions via the Federal Reserve could follow in November and December, too. So savers will need to adjust their strategy accordingly.
For those with CDs set to mature in September, specifically, a nuanced approach will be required to prevent the loss of interest-earning potential. Below, we’ll detail three things to do if your CD matures this September.
See how much more money you could be earning with a top CD here now.
What to do if your CD matures this September
Do you have a CD account set to mature this September? Then be sure to take the following steps:
Don’t let it automatically rollover
Many lenders will give savers a grace period to decide what to do with their matured funds before automatically rolling them over into a new account. But since rates are falling now, that new account could come with a rate significantly lower than the one you opened earlier in 2024 or before. And you’ll need to pay an early withdrawal penalty to regain access to those funds once they’ve formally rolled over. So don’t wait for that to happen, tell your lender now that you’re planning on accessing the funds.
See what new CD rates and terms are available to you online today.
Shop around for rates and lenders
Because rates are in flux right now and because those rates are unlikely to be as high as they were a year ago, it’s critical to shop around for the highest rates and best lenders for your money now. Remember that you don’t need to use the current lender that operates your CD once it matures. You’ll be free to do what you want with those funds, including moving them to an online lender, which tends to offer higher CD rates than those banks with physical locations. But start shopping now so you’ll know which lender you want to use once the money becomes accessible again.
Move it into a long-term CD
Long-term CD rates haven’t been quite as high as their short-term counterparts in recent years – a direct reversal from historic trends — but that doesn’t mean that these accounts don’t have competitive rates. You can still lock one in the 4% to 5% range now and, unlike short-term CDs, you’ll be able to earn that rate for years to come, even as interest rates are cut across products. This is a major feature right now when multiple rate cuts appear possible. But you’ll need to act quickly, as rates on long-term CDs won’t be immune from reductions either. So be prepared to move your money into a long-term CD right after it matures in the current account.
The bottom line
If your high-rate CD is set to mature in September, don’t worry. But don’t procrastinate, either. Start by telling your lender that you don’t want the funds to automatically roll over and take whatever steps are necessary to ensure that doesn’t happen. Start shopping for new lenders and rates, too. And look to long-term CD options, specifically, to guarantee high returns for the years to come, even if rates are cut in the interim. Just be sure to only deposit an amount that you feel comfortable leaving in the long-term CD for the full period, or you could wipe out any interest earned when hit with an early withdrawal penalty.
Police arrested a man on murder charges this month, 14 years after he allegedly killed a man in Virginia, but the victim’s body has never been found.
Shane Ryan Donahue, a Virginia man, is presumed deceased, the Prince William County Police Department said Tuesday. He was last seen leaving his parents’ home in Nokesville, Virginia, on March 22, 2010. Donahue, 23, was headed to his house in Nokesville, but never made it there.
Donahue was added to the National Missing and Unidentified Persons System after he vanished. According to records, Donahue did not have a car and regularly got rides from friends. He frequented Washington, D.C., Baltimore, Fauquier County, Virginia, and Northern Virginia.
The case stumped investigators, who followed a number of leads over the years. This spring, detectives reactivated the investigation and started looking at every detail of the case from scratch, officials said. They revisited people who had been interviewed during the initial investigation and reviewed “digital evidence in greater detail due to advances in analytical technology and modern police investigative practices,” according to a news release.
Officers said Donahue was last seen leaving his parents’ home with Timothy Sean Hickerson, now a 43-year-old Florida resident. Investigators connected Hickerson to a burglary at Donahue’s home that happened just days before the Virginia man disappeared.
Detectives got an arrest warrant this month and, with the help of Florida’s Flagler County Sheriff’s Office, Hickerson was taken into custody in Palm Coast, Florida. Hickerson was charged with murder and burglary, is now set to be extradited to Virginia.
Former President Donald Trump, an avowed proponent of tax cuts, is floating the idea of reversing a measure passed during his tenure in the White House that effectively raised taxes for many U.S. homeowners.
In a post Tuesday on Truth Social, Trump suggested he would scrap a $10,000 cap on deducting state and local taxes (SALT) that was passed as part of the 2017 Tax Cuts and Jobs Act — a massive revamp that he has said boosted economic growth.
Now, in the run-up to the November election, Trump said in the post he would “get SALT back, lower your taxes, and so much more,” although he stopped short of offering details. Trump made the post ahead of a speech he’s giving Wednesday at the Nassau Coliseum on Long Island.
Trump’s new proposal for getting rid of his $10,000 SALT deduction cap comes as the presidential hopeful is pitching several additional tax cuts that would, if enacted, reduce taxes for major groups of voters. He’s also vowed to eliminate taxes on Social Security benefits, a pledge that could get support from the nation’s senior citizens, as well as to end income taxes on tipped workers and on overtime pay, ideas that would help lower- and middle-income Americans.
Yet Trump’s reversal on the SALT deduction has sparked skepticism from lawmakers as well as economists and policy experts.
“So … now Trump is against the SALT tax cap which *checks notes* is a key part of the — only — major piece of legislation passed during his administration?” noted Chris Koski, a political science professor at Reed College in Portland, Oregon, on X.
Rep. Tom Suozzi, a Democrat from Nassau, Queens, said in a statement on Wednesday that he is “happy that the former president is saying that he has finally reversed his devastating decision in 2017 to cap the State and Local Tax (SALT) deduction.” He also urged Trump to convince Republican lawmakers to vote to restore the full deduction “if he is truly serious.”
The SALT deduction cap “has been a body blow to my constituents for the past 7 years,” Suozzi added.
Senator Chuck Schumer, a Democrat from New York, wrote on X,”Donald Trump took away your SALT dedications and hurt so many Long Island families. Now, he’s coming to Long Island to pretend he supports SALT. It won’t work.”
Asked for details about Trump’s proposal to restore the SALT writeoff, a spokeswoman for the Trump campaign told CBS MoneyWatch: “While his pro-growth, pro-energy policies will make life affordable again, President Trump is also going to quickly move tax relief for working people and seniors.”
Here’s what to know about the SALT deduction.
What is the SALT deduction?
The state and local tax deduction allows taxpayers who itemize to deduct property taxes, sales taxes and state or local income taxes from their federal income taxes. Prior to the Tax Cuts and Jobs Act, there was no limit on how much people could deduct through the SALT deduction.
But the 2017 tax overhaul passed under Trump limited the deduction to $10,000 – a blow to many homeowners in states with high property taxes, many of which are Democratic leaning. At the time of the law’s passage, the Treasury Department estimated that almost 11 million taxpayers in high-tax states like New York and New Jersey would forfeit $323 billion in deductions.
Who benefits from the SALT deduction?
Homeowners with high property taxes, such as people in New York, New Jersey and California, were the biggest beneficiaries of the the full SALT deduction.
But some experts also noted that the SALT deduction primarily put more money in the pockets of higher-earning Americans. About 80% of the full SALT deduction had helped people earning more than $100,000 a year, according to the Tax Foundation.
What happened after Trump capped the SALT deduction at $10,000?
The limit has increasingly impacted middle-class homeowners across the U.S. because of rising property taxes and incomes. Some lawmakers have also sought to either repeal or increase the SALT cap, but none of those efforts have borne fruit.
Earlier this year, some lawmakers sought to double the SALT deduction cap to $20,000 for married couples, with the change retroactive for the 2023 tax year. But that bill was blocked in the House in February.
Won’t the SALT deduction cap expire anyway?
Yes, the SALT deduction cap is a provision that’s due to expire in 2025, as are many other parts of the Tax Cuts and Jobs Act, such as a reduction of the individual tax brackets. But Trump has previously indicated he wants to extend the provisions in his signature tax law.
How much would it cost the U.S. to repeal the SALT deduction cap?
It won’t be cheap, according to the the Committee for a Responsible Federal Budget, a think tank that focuses on budget and policy issues.
Eliminating the $10,000 deduction limit “would increase the cost of extending the 2017 Tax Cuts and Jobs Act (TCJA) by $1.2 trillion over a decade,” the group estimates, adding that such a measure would be a “costly mistake.”
Extending the TCJA’s tax cuts would increase the nation’s deficit by $3.9 trillion over the next decade, the group estimates. By adding in a expiration or repeal of the SALT deduction cap, that would grow to $5.1 trillion, it added.
“Lawmakers should not extend the TCJA without a plan to – at a minimum – offset the costs of extension, but ideally the plan would raise revenues relative to current law and help put the nation’s debt on a better trajectory,” the group said in a statement.
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