What Happens To CD Upon Death Of CD Owner?

gcomfort
  |     |   3 posts since 2011

Am I correct in my belief that when a CD owner dies, the beneficiary of the CD, upon presenting a death certificate, can receive the balance of the CD without any penalty because the CD did not run to term?  Or, instead, is just the title of the CD transferred to the beneficiary as the new owner, and the beneficiary can not receive the balance without opening the CD and paying an early withdrawal penalty?

Thanks.



Answers
paoli2
  |     |   2,641 posts since 2011
Best wishes and success with your cancer treatments.  If you are leaving more than one CD to the same beneficiary, it might be helpful to make copies of them and put in a folder to be given to that person at some time.  I have made a binder for our beneficiary and over the years as the CDs mature I replace them with copies of the new ones for the same beneficiary.  I also keep a sheet with the addresses and phone numbers of the banks and/or credit unions the CDs are with plus instructions about getting the death certificate and what to do at the necessary time.  This way they will be fully prepared what to do and where to go when the time comes.
rmbn
  |     |   4 posts since 2016
That is the kindest thing you could possibly do!  You would not believe the tears and frustration I had in trying to sort out my parents' financial affairs after they have passed.
Ally6770
  |     |   4,315 posts since 2010
I cannot imagine would it would be like no knowing the financial situation of someone when you have to settle their affairs after death. 
My children have a copy of the signature cards showing them as beneficiary. Each year I give them a copy of all accounts with the account numbers and list each as checking, savings, CD's, traditional and Roth IRA's. It has the bank's name and phone number next to each. Getting a copy of the signature card is important because I had a credit union that
lost the signature card of my husband's IRA's when he passed. I had a copy of the signature card leaving it to me and then to the children. They would not accept it and I had to go to NCUA. I disclaimed all the traditional IRA's so the children would inherit them after his death and it was a mess. Also remember that 6 months after a death the insurance on the money is no longer covered. 
closecall
  |     |   4 posts since 2019
I looked this very subject up some time ago. Your closing a decedents account, to a beneficiary.
The money is changing partners, so to speak. You should also receive the last posted interest.
Ally6770
  |     |   4,315 posts since 2010
Some places will pay interest to the day of closing, not just the last interest posted. Most also will just put the new persons name on the CD when requested or even split it between the beneficiaries and prepare a new one at the same interest rate if requested with the same due date.
GH1
  |     |   1,059 posts since 2017
I had this happen 6 months ago. All 3 beneficiuaries had to be at the bank with proper id. Present death certificate. Account closed and new checks issued to all 3 people


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