My name is Chris with Money Burst. You've probably noticed that the interest rates for certificates or CD’s, (which just stands for certificates of deposit) as they're sometimes referred to, are really high right now. You may be saying to yourself “Hey, I want to take advantage of these really great interest rates, so I'm going to take a thousand dollars from my savings account and throw it into one of these products.”
But you may be wondering what happens after I reach the end of the term?
These products, certificates or CDs, however you want to refer to them, have a set term that they're open for. It could be for a few months or all the way up to five plus years. Here's what happens and here are your options when you reach the end of that term.
Say thank you for the CD, and that you appreciate it and all the interest that they gave you. You can take that money, whatever you put into the account, plus the interest and move it over to one of your savings accounts.
You may really like this certificate; you can roll it over and do it all over again, a round two so to speak. If you purchased a one-year certificate it will renew again for the same term. They'll take the money that was put in originally, plus the interest and then turn it into a brand new one year certificate.
You can take whatever interest that accrued on the certificate and move it over to your savings account. Then take your original one thousand dollars and roll it over into another certificate for the same term. So, if you had a one-year certificate with a thousand dollars, it will roll over into a brand new one year certificate, but whatever interest was accrued and earned during that period of time will be moved over to your savings account.
Regardless of which option you choose certificates or CD’s, they are a great option to earn a lot more interest than you can in your traditional savings accounts.