CD Early-Withdrawal Penalty
A CD early-withdrawal penalty is a fee that's often charged when you take money out of a certificate of deposit (CD) before the agreed-upon end date. Here is how these penalties work and what you can do to avoid them.
When you buy a certificate of deposit (CD) from a bank or credit union, you are making an agreement—you will leave your money there for a specified period of time and the financial institution will pay you a certain rate of interest in exchange. That rate is typically higher than you'd receive from a savings or checking account. The trade-off is that the CD is less liquid than those other types of accounts (that is, less able to be converted into cash easily at any time).
Original Article Source Credits: Investopedia , https://www.investopedia.com/
Article Written By: Matt Webber
Original Article Posted on: April 22, 2022
Link to Original Article: https://www.investopedia.com/cd-early-withdrawal-penalty-5225111