When interest rates rise, you may find that an old certificate of deposit (CD) is no longer earning a competitive interest rate. You may be asking yourself if it's better to withdraw the money from the CD (break the CD) and deposit that into a new CD at a higher interest rate when there is an early withdrawal penalty for doing so. The issue that complicates this decision is the interest penalty that is charged when you break a CD. Due to this penalty, it may be better to just keep the current CD until maturity.
Should you keep the CD or break it and reinvest your money into a new CD?
This tool is intended to help you decide which option will make you the most money. If you are unsure of what the current balance is on your existing CD, you can use our compound interest calculator to determine it.
Enter the information of the CD that you are considering breaking
Enter the APY of the new CD you are considering reinvesting your money into