What to do when a CD matures

If you put your money into the CD with an eye toward a specific purchase, now would be your opportunity to use the funds. You will need to alert your bank to this decision, and begin the process of withdrawing your funds the way you would for other bank accounts.

Renewing your CD will probably be the default option for your bank. If you do not tell the bank otherwise, it will automatically roll the money into another CD at the same bank.

You should check the rates being offered at your current bank to see if a renewal to a similar CD is in your best interest or if rates have dropped.

In the event your bank is offering you CDs with lower rates, it may make sense to move your money into a different CD . Check if available options have better terms — no fees, lower minimums or better rates, for example.

Once you’ve looked at your own bank, check the rates offered by other banks so that you know you’re getting the best rate.

If you’re expecting market rates to go down, it may be a good move to lock in a long-term CD. However, if the opposite is true, going for a shorter term may be more appropriate.

You also have the option to pick from different types of CDs, and to purchase CDs of different durations. Laddering is a process in which you purchase CDs of different term lengths, taking advantage of the different maturation dates. This way, you have the option to renew or withdraw your money at multiple intervals.

If you want to stay at your bank but don’t want to put your money into a CD, you have other options.

Banks also offer high-yield savings and money market accounts, which may be suitable alternatives to CDs.

• A high-yield savings account may have an annual percentage yield (APY) comparable to a CD, with the added benefit of liquidity. However, these accounts can have account minimums as high, or higher, than CDs.
• A money market account will have an APY somewhere between a high-yield savings account and traditional savings account, with an account minimum that can eclipse CDs as well. Like high-yield savings accounts, these funds also have the added benefit of liquidity, whereas CDs do not.

» MORE: CDs vs. savings accounts: Which is right for you?

If your goals and risk tolerance have changed, you also have the ability to invest. Choices include stocks, bonds, exchange-traded funds (ETFs), mutual funds and options.

• Stocks can be quite volatile but have the ability to return profits significantly above CDs and high-yield savings accounts.
• Bonds — either corporate or government — are traded in the public market. Corporate bonds will generally have returns higher than CDs and lower returns than stocks, but they are less volatile than stocks. Government bonds are comparable to CDs in both safety and returns.
• ETFs are baskets of individual stocks bundled together and sold on a public market. These provide access to broad sectors and minimize individual stock risk.
• Mutual funds are similar to ETFs, with the major exception that these funds are not traded on the public market. Mutual funds must be purchased from and sold through a custodian.
• Options are a type of financial contract that allows investors to buy or sell securities at a preset price by a certain date. This is an extremely risky financial instrument that should only be used by those who are well-equipped to handle the potential downsides.

» MORE: Are CDs worth it? How much money should you put in a CD?