The 3 Biggest Mistakes You Can Make When Investing in CDs

Motley Fool

Sep 27, 2025

Image source: Getty ImagesCertificates of deposit (CDs) can be a smart, safe way to earn more on your savings, letting you lock up your money for a set period in exchange for a guaranteed return.But ...

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Learn how to avoid the biggest CD pitfalls today.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4116":"互联网服务与基础架构","CD":"Chaince Digital Holdings Inc."},"translate_title":"投资CD时可能犯的3个最大错误","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CD":0.9},"content_text":"Image source: Getty ImagesCertificates of deposit (CDs) can be a smart, safe way to earn more on your savings, letting you lock up your money for a set period in exchange for a guaranteed return.But even though CDs are low-risk, there are a few ways you can trip up. Choosing the wrong CD or ignoring the fine print can limit your return -- or tie up your money when you need it most.Here are three of the biggest mistakes to avoid when investing in CDs.1. Not shopping around for the best rateMany people pick a CD from their primary bank without comparing options. That can be a costly mistake.Let's say you invest $10,000 in a 1-year CD:At the current national average of 1.70% APY, you'd earn $170 in interest.With a top CD offering 4.00% APY, you'd earn $400.That's more than twice as much in return, just for checking all your options.Take time to compare CD rates across multiple banks and credit unions. Online banks often offer stronger CD rates than traditional ones, and some come with limited-time offers with boosted rates.Ready to shop around? Check out our list of the best CDs available today to get started.2. Picking the wrong term lengthIf you withdraw your money before your CD matures, you'll likely face an early withdrawal penalty that can wipe out a big chunk of your earnings. Before you open a CD, make sure it fits your financial needs and you won't have to take your money out early.If you're not sure when you'll need the money, consider shorter-term CDs -- or building a CD ladder, which is when you spread your money across CDs of different lengths.And for your emergency fund or money that you might need instant access to, consider a high-yield savings account instead. You'll get much more flexibility than a CD while still earning a solid amount in interest.3. Ignoring the CD maturity dateWhen your CD matures, your bank will usually give you a short grace period -- around seven to 10 days -- to decide what to do next.If you don't act, though, your bank might automatically renew your CD for the same term -- sometimes even at a different interest rate.You'll want to find out in advance what your bank does once your CD matures. Set a calendar alert so you're ready to make a decision. Then, you can decide whether to take out your money or roll your CD over into a new one.Invest in CDs the right way todayUsing CDs the right way comes down to a few key steps.Start by comparing CD rates from multiple banks to get the best return. Choose a term that lines up with your needs, and avoid locking in funds you might need access to. Then make a plan for the maturity date so you can move your money if necessary.Want to build a solid CD strategy today? See our full list of our favorite CDs to get started now.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}