bank rates

4 Questions I Ask When A CD Matures

The answers could gain you a little extra yield.I’ve developed a list of questions I ask whenever any CD matures.

These questions can help me gain an edge and earn a bit of a higher return on my next CD purchase.

If the answers won’t lead to higher yields, they can help me decide whether to renew a certificate of deposit or move my money to another bank or credit union.

Here are the four questions:

Question 1. If I renew, will you negotiate a higher rate than posted?

Although I’ve never had a customer service representative actually guffaw in response (some may be straining to hold it back), the answer is usually “no.”

Sometimes, though, I hear, “What did you have in mind?”

Typically, where the bank doesn’t have a specific loyalty reward or bonus for CD renewals — like Ally Bank or MetLife — the CSR will ask what I can get elsewhere, then consult a supervisor about meeting it.

At a bank, it seems to help when the higher rates I provide are at credit unions, the banks’ natural rivals.

I used to think I could negotiate only at brick-and-mortar community banks, face-to-face with an employee.

But where I’ve established telephone or email relationships with CSRs — and have a large amount on deposit — I’ve also negotiated CD rates at online banks valuing long-term depositor relationships.

Question 2. Can I add funds during the post-maturity grace period, and if so, how?

This can be important if I’m given a higher rate than posted.

Although most institutions permit adding to a CD’s balance during the grace period, some systems require opening a new CD. And an advertised rate bump-up might not be available for that.

Further, there are details to iron out, like whether I can use an ACH transfer to get the money to the account, or will I have to send a check or wire the cash.

Funding can be sticky, for example, if I’m using money from a CD maturing within the grace period at another bank.

Question 3. If I change the CD’s term (e.g., from 12 to 24 months) or principal balance, will I be assigned a new account number and need to reestablish my interest payment option, PODs, etc.?

Sounds straightforward, but I’ve experienced hiccups — and extra paperwork — on the rare occasions when I’m given a new number.

Question 4. What happens to the interest posted at maturity?

I like my CD balances in round numbers, so I have to ensure the final payment is withdrawn, not rolled into the principal. Most banks do this automatically if you chose periodic interest payouts initially, but at some (MetLife, for example), you have to ask.

I’m sure I’ll develop other questions over time, because I always learn by doing.

And then I’ll kick myself for not having asked them sooner.

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