Best & Fastest Way To Get Your Money At CD Maturity?

mark1010 | Mar 31, 2019 | 16 posts since 2018

I have several CD's from out of State Banks/CU's that will mature this year. Whats the fastest/easiest/best way to close the CD without loosing too many days of non interest?

In addition to the CD with each institution I also have a checking accounts. So I'm thinking at maturity date transfer the CD amount into the checking account & write a check new bank/CU to open a new CD.

Your thoughts?

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Answers

me1004 | Apr 1, 2019 | 1,379 posts since 2010

I always set up a checking account at the institution too. And I simply close the CDs tot he checking, and write a check. That makes getting your money out fast easy; its getting it to a bank somewhere else that can have delays. But for CUs in the shared branch system, that is fast too, you just go to a local CU in the shared branch system and deposit to your CU immediately as if in their branch.

micheleforan | Apr 5, 2019 | 39 posts since 2018

As me1004 said, have the CD money go into the checking account at that institution. However, before doing that link that checking account to an external bank. As soon as the money gets into the checking account set up a transfer at the external bank and use an ACH transfer to pull the money into the external bank. It should get the money within a day or so and start earning interest right away. There will be a couple day hold on the money, but at least it will earn interest during that time. (The external bank you use should have a high interest savings account.) Any new CDs you then buy can be bought using an ACH transfer rather than a check by mail. Snail mail is slow and interest is lost.

RZ | Apr 5, 2019 | 391 posts since 2017

On the contrary no interest is lost when funding a CD by check/snail mail. In fact if the funds are received on Friday you will not only not lose interest but actually get double interest as the source bank will not debit your account until the following Monday. ( Even better if it is a 3 day holiday weekend! ). You will lose some interest if you accept a matured CD with a check or ACH transfer. A same day wire is the fastest method but depending on the fee and the amount you are wiring, it may or may not be the most economical.

micheleforan | Apr 5, 2019 | 39 posts since 2018

I only meant that while the check is in the mail and the money in the checking account is not earning interest you will lose the interest for that length of time. Snail mail may take a few days but ACH transfers take one day usually.

me1004 | Apr 5, 2019 | 1,379 posts since 2010

But you will lose the interest for at least a day or two if you ACH it -- and the outgoing bank might delay that. Also, you might not need to mail to the new bank or credit union at which you want to open a CD, especially a credit union where you can use a shared branch for immediate deposit to your account.

Bottom line, it depends on whether you have to mail that check or not, and then will it take more than maybe two days in the mail.

As for wire, the cost of the wire is probably as much or more than any interest you might lose.

paoli2 | Apr 5, 2019 | 2,641 posts since 2011

On the subject of using wires, even tho my local bank charges for incoming wires (which I never understand), I have found that it my favorite way to get the funds from matured CDs in another city. I call the "out-going" wire bank as early as possible in the morning of the day the CD matured to make sure the funds are in our savings or checking account in the bank and get the wire to our local bank done. Before noon of the same day, I will see the money already posted in our account and ready for us to use it to take to whatever other bank or credit union I have already planned to put it in. It's all done on the same day! Sure it may cost a few more dollars to do it this way but sometimes saving can't be all about every single dollar. Convenience is the payoff for me these days.

BTW, I think the new set up the post office has which allows us to see an actual photo of whatever mail and/or packages they will be delivering to us that day is fantastic! I use it especially to see which interest checks to expect or any other important mail we are due to get. If you see the photo of it and it doesn't arrive, you can call the post office and they will check it out for you. That is very helpful to people like myself who take the time to use it.

RZ | Apr 6, 2019 | 391 posts since 2017

It clearly depends on the checking account! Vanguard Prime yields an APY of 2.5%. While the check is in the mail interest is still being accrued up until the time that the receiving bank cashes it. Typically the new CD starts paying interest the day the check is received and the actual debit could be several days later.

solarado | Apr 5, 2019 | 89 posts since 2018

For larger amounts, consider a wire transfer. The fees may be less than missing a couple days interest. ACH lag can vary substantially at different banks.

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