Congratulations! You’ve opened a certificate of deposit with Marcus (and hey, we’re glad you chose us to do so). Now you might be wondering: what do you do next?
The short answer is not a whole lot (really!). Just sit back, relax and watch your savings grow. Okay so there’s actually a little bit more to it. Here are a few things you should know.
Interest rates on our CDs are fixed, meaning your rate remains the same for the full term. So for example, if you opened a 12-month High-Yield CD, you’re guaranteed to get that 3.00% for the full year (as long as you leave all your money in, of course).
The benefit here is you don’t have to worry about the rate on your CD changing unexpectedly, even if Federal Interest rates or the rate on our Online Savings Account is changing. That’s why, to our first point, you can rest assured in knowing your money is growing at a rate that’s locked in.
Once your Marcus CD matures – or put simply, the term’s up – you have a few options which are outlined in the CD Maturity Center.
You can access the Maturity Center at any time, not just when your CD term is up, by simply logging into your Marcus account. Once you’re logged in, select your CD, then select ‘View/edit plan’ under the maturity plan details. From there, you can view the date your CD is set to mature, what the estimated balance will be, and the renewal term (should you decide to renew).
You’ll also see the following options you can take once your CD matures:
It’s important to note that when you renew a CD, you’re renewing for the same term using the funds that are already in the account, but the APY may be different. The newer APY – the one offered at the time when you’re choosing to renew – is the one you’re signing up for.
Before you decide on what you’ll do when your CD term is up, it may help to understand how withdrawals on Marcus CDs work. Both our high-yield CDs and No Penalty CDs come with locked interest rates – no difference there. Where these two CDs differ is in when you’re able to withdraw your funds.
With a Marcus high-yield CD, you cannot make an early withdrawal from your CD. You have to wait until the term’s up to access your money. If you tap into this account early, you’ll face a penalty.
On the other hand, our No-Penalty CDs offer more flexibility when it comes to making withdrawals. If you’ve opened a No-Penalty CD, waited at least seven days, and then decide you want to withdraw the balance, go right ahead. Just keep in mind that you’ll need to take out the full balance (sorry, no partial withdrawals allowed). Simple, right?
There is one nuance here: with High Yield Marcus CDs, you can withdraw interest you’ve earned on that CD without facing a penalty. So let’s say that you’ve got $50,000 in a 12-month High-Yield CD that’s earned $500 in interest to date – you could withdraw the $500 in earned interest at any time. You can take out a one-time lump sum of interest earned, or take monthly disbursements of interest.
Keep in mind that’s not the case for our No-Penalty CDs. If you want to withdraw your funds during your NPCD term, you simply close the account (but remember, there’s no penalty if it’s seven days after funding) and withdraw your full balance. For more information on interest disbursements, check out our FAQs.
The one caution here is by taking out that $500, you’re taking away some of the potential for that CD to grow as much as if you’d just left that $500 in there. Remember: one major perk of CDs is the ability for you to earn compound interest. Every day, you earn interest on your principal balance, plus the interest you earned prior to that month. If you take out that $500 in earned interest, you’re taking away some of the power of compound interest.
Like we said earlier – the best way to maximize the money in your CD is just letting it sit and grow.
The above three points are must-knows, so consider this a bonus round. If you’re loving your Marcus CD (the feeling is mutual!) and want more options for making the most of your savings, you can always consider opening another one. You could even mix things up, by say, adding a CD with a different term, or trying out the No-Penalty CD we mentioned.
There’s also a variety of CD strategies you can try – CD laddering being a popular one. The goal of building a CD ladder is to lock in high APYs across multiple CDs, instead of lumping all of your funds into one CD. Those multiple CDs will mature at different points in time, freeing up your cash to either use or continue rolling over into new CDs. If it sounds complicated, don’t worry we promise it’s not, and we’ve got an article to walk you through it.
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