bank rates

Details, Details: My Year-End CD Checklist

Chasing rates as I do, my CD investing can sometimes get a bit chaotic.

It’s not easy to forever be moving money from one institution to another and from one certificate of deposit to another.

A mature man writing something as he uses a calculator

That’s why I pause at year’s end and check my paperwork (hard copy and digital) to make sure I (or my banks and credit unions) haven’t bollixed things up somewhere along the way.

Here are some details I double-check:

I verify all payable-on-death (POD) accounts.

Maintaining the accuracy of POD accounts is critical for estate planning and ensuring adequate federal deposit insurance coverage.

I can usually check PODs by looking at my account information online or my most recent account statements.

Where neither is useful, I check account documents (a signature card or beneficiary designation form) and also ask email confirmation from the institution that its records agree with mine.

I review the early withdrawal rights and penalties of my lower-yielding CDs.

By doing this, I identify CDs that I may want to close early in order to invest the funds in an attractive CD promotion during the coming year.

Although I always plan to hold CDs to maturity, I sometimes close them when low early withdrawal penalties make it economical to take advantage of available CD promotions.

In fact, in late 2013 I closed several Pentagon Federal Credit Union CDs early to invest the funds in a 3.04% 5-year CD deal at PenFed itself!

I review my checking, savings and money market accounts to see if any can be jettisoned.

My CD rate-chasing has produced quite an assemblage of these, which I use to collect CD interest or get a favorable “relationship” rate.

But at year’s end, the very same rate-chasing usually results in a few such accounts with no related CD, simply because I’ve closed all my CDs at the institution.

In the past, I tended to close these accounts, but today (ever watchful for possible inactivity fees), I’m inclined to keep them open to make it easier, or even more lucrative, to establish future CDs at the institution if and when it again offers good rates.

I recheck the maturity dates of all CDs coming due in the next year.

I’m not afraid of overlooking a maturity.

Rather, because I sometimes use maturing balances to meet large anticipated expenditures, like scheduled tax payments, I need to know the precise date I can get my hands on them.

This doesn’t purport to be an exhaustive list, but it’s one designed to contribute to my peace of mind in the new year.

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