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4 things to avoid doing when your CD matures
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Consumers and borrowers looking for financial relief received bad news last week on a Consumer Price Index report of a rise in inflation in February. High gas and home prices pushed inflation up, and consumers continue to feel the pinch at the grocery store. The year began with high hopes after the Federal Reserve hinted at several rate cuts in 2024. But with inflation continuing to persist, those cuts now appear to be delayed.
While high interest rates continue to damper borrowing opportunities, they’ve been a boon for savers taking advantage of high deposit account rates. Rates for high-yield savings accounts and certificates of deposit (CDs) have soared in recent years, especially compared to traditional savings account rates.
CD rates, in particular, are inching closer to 6%, with several online banks offering substantial returns for their account holders. These accounts reward you with high yields in exchange for agreeing to hold your money in the account for a specific term, usually ranging from three months to five years.
Many Americans have taken advantage of high CD yields in recent years, but now their accounts are reaching their maturity rate. While CD holders have several avenues to explore with their account funds, they should be careful to avoid some common mistakes, several of which we will break down below.
Not sure if a CD is worth it for you? See how much more you could be earning here today.
4 things to avoid doing when your CD matures
Here are three mistakes CD account holders should avoid when their CD matures.
Letting it rollover to a CD with a lower rate
“One common mistake savers make when their CD matures is automatically letting it renew without checking if it’s the best option,” says Taylor Kovar, CFP and founder at 11 Financial. “Interest rates could have improved elsewhere, meaning you could miss out on better earnings.” As Kovar reminds savers, your financial goals may have changed since you opened your CD, making it less suitable for your future needs. “Instead of allowing an automatic renewal, it’s wise to explore the market for superior rates.”
See what new CD rate you could qualify for now.
Moving funds into a traditional savings account (with a lower rate)
One of the primary benefits of stashing your cash in a CD is to secure a higher, guaranteed yield while saving for a short-term savings goal. Moving money from an expiring CD into a traditional savings account generally runs counter to that objective since regular savings accounts usually offer lower yields.
According to the March data from the Federal Reserve, a 12-month CD yields an average of 1.81%, over three times higher than the average yield of 0.47% for a traditional savings account. However, that CD average includes yields from traditional savings accounts. Currently, several online banks and credit unions offer CD interest rates between 5% and 6%.
“Online banks consistently offer higher rates than your traditional bank or credit union,” says Dr. Preston D. Cherry, founder and CEO at Concurrent Financial Planning and Director of Charles Schwab Foundation Center for Financial Wellness at University of Wisconsin-Green Bay. “Not shopping around can result in missing out on higher interest payments and lock you into a rate that doesn’t outpace rising inflation rates.”
Not diversifying investments for a balanced portfolio
CDs are an excellent option for savers looking for a guaranteed return and federal deposit insurance protection. They’re good for helping you reach a savings goal, but you may have better options if you’re looking to build wealth. For example, stock market investments historically deliver higher returns than CD yields, albeit with higher risks and no FDIC insurance.
Cliff Ambrose, founder, FRC and wealth manager at Apex, says CD holders should review their financial situation before their CD expires. “Savers should avoid the mistake of passively letting their CD roll over without assessing their options or diversifying their investments,” says Ambrose. “By not being proactive, they might miss out on better returns or terms elsewhere in the market.”
Not using funds to pay down debt
Financial experts commonly advise utilizing CDs to reach a savings goal faster. Say you plan on putting a down payment on a home in two years. A 24-month CD could help you achieve your goal quicker by offering higher yields than other deposit accounts.
But, if you’re not saving towards a specific goal, transferring your expiring CD funds to pay off high-interest debt may make more sense than reinvesting into another CD. As Cherry notes, “Interest rates on CDs are often much lower than those on high-interest debt, which range from 10% to 20% [or higher]. Paying off debt rather than stashing cash in lower-yielding CDs generates a higher return on your dollars.”
The bottom line
If you suspect you may need to access money in your CD account, you may want to consider other options. Keep in mind, you’ll likely incur an early withdrawal penalty if you pull money from your CD before its maturity date.
One way to earn greater deposit yields without locking your money into a CD is to open a high-yield savings account. These accounts earn similar yields to a CD, but allow you to access your funds at any time with no prepayment penalty.
Whether you park your money in a high-yield savings account or CD, however, it’s important to regularly review your financial needs alongside your deposit and investment portfolio. As your circumstances change, adjust your savings and investment strategies accordingly to make sure your money is working toward your financial goals.
Explore your high-yield savings account options here to learn more.
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Dublin’s Grafton Street was mobbed last month when word spread that Coldplay was coming to shoot the video for their new single, “We Pray.”
“I was a little nervous for you there in the beginning,” said Mason.
“Yeah, but you have to just trust in the goodness of people – and the proficiency of the police!” laughed Chris Martin.
Martin was joined by collaborators Burna Boy, Tini, Elyanna and Little Simz. “The five of us actually had never actually played the song in the same place before,” said Martin. “So, our first time doing it was on the street in the middle of all those people.”
Coldplay was in Dublin for four sold-out nights at Croke Park, on their “Music of the Spheres” world tour. With more than 10 million tickets sold, and box office of over $1 billion, Billboard has crowned it “the biggest rock tour of all time.”
Mason asked drummer Will Champion, “You guys are in the middle of literally a record-breaking tour. Does it feel like that to you?”
“Sometimes it’s hard to see the woods for the trees,” Champion replied. “We’re aware that we’re having such a great time. We’re really enjoying ourselves.”
“It definitely was extremely loud last night,” said bassist Guy Berryman.
Champion, Berryman, Martin and guitarist Jonny Buckland haven’t always felt the love, especially in the early years. But critics, who once asked “Why does everyone hate Coldplay?” are now calling them “the 21st century’s defining band.”
“It seems like you’ve kind of been fully embraced even by the music critics,” said Mason.
“Well, you’re very sweet. I mean, that’s just not true!” laughed Martin.
“I don’t think you’re ever fully embraced,” said Buckland.
“Also, we are really not a rock band,” said Martin. “So, when we’re judged by those parameters, we’re always gonna come up short. One thing I’d say that we’ve become more comfortable with is just being ourselves.”
Their catalog of hits stretches across a quarter of a century. Martin said, “The truth of it is, some songs arrive fully formed, basically – not Jonny’s parts or Will’s or Guy’s parts, but my part. And those are the rarest, but they’re always the best, the ones that I had least to do with.”
“But sometimes they’re the hardest to produce, because you don’t want to ruin them!” laughed Buckland.
Martin says he can feel that right away: “Definitely, yeah. The songs of ours that have connected with the most people, they connected with me first. I was like, ‘Oh, this is really good!’ ‘Yellow,’ ‘Viva La Vida,’ ‘Fix You,’ ‘Sky Full of Stars.’ They just land.”
“Viva La Vida” by Coldplay:
“So, in a strange way, you’re listening to it, you’re the first person to listen to it; that’s what it feels like,” said Martin. “With the song ‘We Pray,’ we were in Taiwan on tour about ten months ago. I think it was after a show and I woke up in the middle of the night, this song was just in my head called ‘We Pray.’ And it said, ‘You have to get outta bed and do this now.'”
Coldplay performed “We Pray” with their collaborators on stage for the first time in Dublin. “To have heard a song in the middle of the night in Taiwan and then ten months later it’s on stage in Dublin? I mean, that’s in itself an amazing journey,” Martin said.
Martin started writing songs at a young age: “The first one arrived when I was about 11,” he said.
Martin is always writing, even while on the road. Every morning, he sits down to write freeform – whatever he’s thinking about. “I do that as a way of staying sane!” he laughed. “For 12 minutes in the mornings, I write anything that’s in my head, and it’s often very terrible and very depressed or very anxious, or all of the stuff that you don’t really want anyone else to hear, but you need to release. So, I do that for 12 minutes, and then I burn it.”
“You literally light it on fire?” asked Mason.
“Yeah, or tear it up and flush it away. And it just kind of gets rid of so much nonsense,” Martin said. “Definitely helps in a band, too. Because in the old days we would have a lot more tension and a lot more volatility. But that’s calmed down a lot.”
Buckland was asked about the incredible sense of community at their concerts. “I think this is the point where we are most happy,” he said. “I think we got to that point by being in a band for 25 years and then finally it sort of all clicking into place.”
“Is that just a process of time?” asked Mason.
“Well, I think a process of time and hard work,” said Martin. “We’ve worked quite hard on how we communicate with each other and giving each other space. We tour a lot slower now. We only do about 65 shows a year, which isn’t that many.”
Coldplay’s new record, “Moon Music,” is the band’s tenth studio album.
Martin has said the band would release its last album in 2025. “It was right and it was wrong, like most things I say,” Martin explained. “We are only going to do 12 proper Coldplay albums, but we’re a little bit behind. Not too far behind!”
Buckland explained, “We’re asking for an extension!”
So, why 12 albums? “That’s just what it’s supposed to be,” Martin replied. “I don’t think anyone needs more than that from us. The Beatles did 12.”
Mason asked, “Do you guys have other things you want to do? Is that part of this?”
“Not at all. We’d like to keep playing live,” said Martin.
“So, that goes on?”
“Oh, yeah, yeah – that gets better and better,” Martin said.
“Don’t wanna stop Coldplay,” said Buckland.
You can’t stop Coldplay. Chris Martin says he has to keep sprinting across stadiums.
Why does he have to? “I think it’s like asking an apple tree why does it make apples?” Martin replied. “That’s ’cause that’s what I was made to do. And also, I’m really happy doing it.”
Coldplay performs “feelslikeimfallinginlove” at Glastonbury 2024:
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Story produced by Jon Carras. Editor: Mike Levine.
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On Tuesday, former President Jimmy Carter turns 100 years old. Among those wishing him well is a man who understands the trials of life in the Oval Office, our current President, Joe Biden:
Mr. President, on behalf of the entire Biden family, and the American people, Happy 100th Birthday!
Mr. President, you’ve always been a moral force for our nation and the world. I recognized that as a young senator. That’s why I supported you so early. You’re a voice of courage, conviction, compassion, and most of all, a beloved friend of Jill and me and our family.
We know this is the first birthday without Rosalynn. It’s bittersweet, but we also know she’s always with you. She’s in your heart; she’ll never go away. She may be gone, but she’s always going to be with you. She’s always there, and I know you know that.
Your hopeful vision of our country, your commitment to a better world, and your unwavering belief in the power of human goodness continues to be a guiding light for all of us.
You know, you’re one of the most influential statesmen in our history. Even after you left office, the moral clarity you showed throughout your career showed through again in your commitment through the Carter Center and Habitat for Humanity – resolving conflicts, advancing democracy, preventing disease, and so much more. It’s transforming the lives of people not only at home but around the world.
Put simply, Mr. President, I admire you so darn much.
Jill and I send to you and your incredible family our love. May God continue to bless you, Mr. President. You’ve been a good friend.
Gallery: President Jimmy Carter
Gallery: Carter before the White House
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Story produced by Robert Marston. Editor: Steven Tyler.
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