Account maturity is the date a time-bound deposit or investment reaches the end of its agreed term, at which point the institution owes you back your principal plus any interest still due. It applies to certificates of deposit, Treasury securities, and most bonds. What matters day to day is not the definition but what you do around that date: the original interest rate stops, a short grace period opens, and if you take no action your money may automatically roll into a new term you did not choose.
What Account Maturity Means
When you open a CD or buy a bond, you agree to leave your money with the institution for a specific period. The maturity date is the last day of that period. A six-month CD opened on January 1 matures on July 1. A 10-year Treasury note purchased in 2026 matures in 2036.
The date is locked in at the outset. The institution cannot move it on its own, and you cannot pull the money out early without consequences. In exchange for that commitment, you receive the interest rate you were promised when you opened the account.
Which Accounts Have a Maturity Date
Several common products are built around a maturity date:
- Certificates of deposit, which typically run from three months to five years at a fixed rate.
- Treasury bills, sold at a discount and paid at face value on maturity.1TreasuryDirect. Treasury Bills
- Series I savings bonds, which earn interest for up to 30 years and are paid out automatically at maturity if you have not cashed them in.2TreasuryDirect. I Bonds
- Municipal and corporate bonds, which pay periodic interest and return the face value to holders on the maturity date.
Each of these products states the exact maturity date in the purchase agreement or prospectus, so the date is known from the day you buy in.
What Your Bank Must Tell You Before Maturity
Federal regulations require your bank to give you advance notice so you can decide what to do with the money. For a CD longer than one month that renews automatically, the bank must deliver a disclosure at least 30 calendar days before maturity, or at least 20 calendar days before the end of the grace period if the grace period runs at least five days.3eCFR. 12 CFR 1030.5 – Subsequent Disclosures
For CDs longer than one year that do not renew automatically, the notice must arrive at least 10 calendar days before maturity and tell you whether interest will be paid after that date.3eCFR. 12 CFR 1030.5 – Subsequent Disclosures The disclosure should include the new interest rate and annual percentage yield when known, or a phone number to call for that information.
Whether interest keeps accruing at the old rate after maturity depends on your account agreement and the bank’s policy.4HelpWithMyBank.gov. Does the Bank Have to Pay Interest on My CD After It Matures In most cases the original rate stops on the maturity date.
Your Choices During the Grace Period
Most auto-renewing CDs give you a grace period after maturity to change your mind without paying a penalty. Federal law sets the floor at five calendar days, and many banks offer seven to ten.3eCFR. 12 CFR 1030.5 – Subsequent Disclosures Within that window you generally have three options:
- Withdraw the full principal and any accrued interest, which closes the account.
- Let the account renew into a new CD, usually for the same term at whatever interest rate the bank is currently offering.
- Move the money into a different product, such as a savings account or a CD with a different term.
If you miss the grace period and the account auto-renews, you are locked into the new term. Pulling the money out after that triggers an early withdrawal penalty on the new CD, not the original one. Reading the maturity notice when it arrives is the simplest way to avoid getting caught by an unwanted rollover.
Pulling Money Out Before Maturity
Taking money out of a CD or other time deposit before the maturity date almost always costs you. Federal rules classify a time account as one where withdrawals in the first six days after opening carry a penalty of at least seven days’ simple interest.5eCFR. 12 CFR Part 1030 – Truth in Savings, Regulation DD That is a federal floor. Banks routinely set much higher penalties, and the formula has to be disclosed when you open the account.6HelpWithMyBank.gov. What Are the Penalties for Withdrawing Money Early From a CD
In practice, expect anywhere from a few months of interest on a short-term CD to a year or more of interest on a longer one. Some banks waive the penalty when the account holder dies or becomes disabled, but that is a bank policy, not a federal requirement.
If you do pay a penalty, you can deduct it on your federal tax return as an adjustment to income, which means you get the deduction even if you do not itemize.7Internal Revenue Service. Publication 550 – Investment Income and Expenses
When the Issuer Ends It Early: Callable Products
Some bonds and CDs include a call feature. That lets the issuer end the investment before the stated maturity date, usually when interest rates have dropped and the issuer would rather stop paying the rate you locked in. A callable five-year CD, for example, might allow the bank to call it after one year.
The problem for you is reinvestment risk. The money comes back sooner than planned, and the best rates you can now find may be lower than what you had. Earning 5 percent on a bond that gets called into a 3.5 percent market means a real cut in income going forward.8FINRA. Callable Bonds: Be Aware That Your Issuer May Come Calling
Before you buy a bond or brokered CD, check the offering statement for the call date, the call price, and the conditions under which the issuer can exercise it.8FINRA. Callable Bonds: Be Aware That Your Issuer May Come Calling A non-callable product removes the risk, usually in exchange for a slightly lower rate.
Taxes on the Interest
Interest on CDs, Treasury securities, and most bonds is taxable as ordinary income in the year you receive it or become entitled to receive it. Under the constructive receipt rule, interest that has been credited to your account and is available for withdrawal counts as income that year even if you leave it in the account.9eCFR. 26 CFR 1.451-2 – Constructive Receipt of Income
For a CD of one year or less that pays all interest in one lump at maturity, you report that interest in the year the CD matures. For longer CDs that credit interest annually, you report each year’s interest as it is credited.7Internal Revenue Service. Publication 550 – Investment Income and Expenses
Your bank or brokerage sends you a Form 1099-INT for any account that paid at least $10 in interest during the year. Treasury interest appears in Box 3 and is exempt from state and local tax but still subject to federal tax. Tax-exempt municipal bond interest appears in Box 8 and is generally exempt from federal tax.10Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID
If You Do Nothing After Maturity
If a CD or bond matures and you never claim the money, renew the account, or respond to notices, the funds do not stay with the bank indefinitely. Every state has abandoned-property laws that set a dormancy period, usually three to five years, after which the institution must report the funds and turn them over to the state treasurer or comptroller as unclaimed property.
You can still get the money back after that, but you have to file a claim with the state’s unclaimed property office and prove ownership. Any interest that would have accrued during dormancy is usually gone. Responding to maturity notices and keeping your address current with every institution that holds your money is the way to keep that from happening.