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A grace period is a short window — typically between seven and 10 days after your CD term reaches maturity — when you can decide what to do with your funds. During this time, you can:
Assuming your CD has three years remaining to maturity, you'd pay the $400 penalty and give up on $1,224 in interest when you break it — a total cost of $1,624.
For example, rather than buying a three-year CD for $15,000, you could buy three $5,000 CDs with different maturity dates ranging from monthly to yearly. When Inflation or Taxes Increase
Generally, there is a "window" after maturity when CD can be cashed out without penalty. In the absence of such directions, the institution may roll over the CD automatically, once again tying up the money for a period of time. Additionally, the CD holder may be able to specify at the time the CD is opened for it not to be rolled over.
A variable-rate CD — also called a flex CD — is a type of certificate of deposit with an interest rate that can fluctuate periodically over the term of the CD based on market conditions.
The CD term: The term of the CD tends to impact the early withdrawal fee. In general, the longer a CD term, the bigger the penalty. The yield: Most banks charge early withdrawal fees based on the ...
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