What should you check before opening a CD?
The rate matters, but the date you get your money back matters just as much. Before you open a CD, make sure the term, penalty rules, minimum deposit, and renewal process all make sense for you.
When does it mature?
Pick a term that lines up with when you may need the money. A slightly better rate is not much help if the cash is still locked up when the bill comes due.
What happens if you cash it out early?
Read the early-withdrawal penalty before you commit. Depending on the CD, leaving early can cost you part of the interest you expected to earn.
How much do you have to deposit?
Make sure the minimum fits your plan and still leaves enough cash available for emergencies and near-term spending.
Are you comparing similar terms?
Compare APYs on CDs with roughly the same maturity. A 6-month CD and a 3-year CD are not interchangeable just because one happens to pay more.
What happens at maturity?
Check the grace period and whether the CD renews automatically. If it does, know what happens if you forget to move the money when the term ends.
Is the deposit insured?
Confirm where the deposit is held and how federal deposit insurance applies with any other money you already have at the same institution.