The penalty in dollars
Months of interest mean nothing until converted. Three months on $10,000 at 1.00 % APY is about $25; twelve months at 5.00 % is about $500.
Break a CD early
Yes, you can close a CD before maturity — the price is the early-withdrawal penalty, usually 3 to 12 months of interest, and on short terms it can reach into principal. The move pays off only when the new APY earns that cost back before the old term would have ended, so the decision is arithmetic, not instinct. Two windows are free: the first 7 calendar days after opening, and the 7-10 day grace period after maturity.
This page is not a bank, a broker or a rate marketplace — it opens no accounts, moves no money and endorses no offer.
Scroll the strip sideways — 6 cards.
Months of interest mean nothing until converted. Three months on $10,000 at 1.00 % APY is about $25; twelve months at 5.00 % is about $500.
Regulation DD gives most new time accounts a 7-calendar-day window to withdraw without an early-withdrawal penalty. The cheapest exit is the earliest one.
Most CDs allow 7-10 days after maturity to act before automatic renewal. Miss it and a new term starts, with a new penalty to leave.
New-APY gain over the remaining term minus the penalty. Positive means move; negative means wait for maturity and use the grace period.
Full balance out free before maturity, at roughly 0.1-0.5 percentage points below a comparable fixed term in normal markets.
FDIC coverage is per depositor, per insured bank, per ownership category — permanent since 2010 after the 2008 raise from $100,000.
Three pages, three questions
The penalty is a slice of your interest — usually 3 to 12 months' worth — and on short terms it can cut into principal.
Fixed-term CDs carry an early-withdrawal penalty set in the account disclosure, and the standard range is 3 to 12 months of interest, with longer terms usually carrying the larger charges. Because the penalty is defined in months, its dollar size depends on your balance and your rate: three months of interest on $10,000 at 1.00 % APY is about $25, while twelve months on the same balance at 5.00 % APY is about $500.
On short-term CDs the penalty can exceed all the interest earned so far. When that happens, some banks deduct the difference from principal, so you can leave with less than you deposited. The disclosure tells you whether your bank does this; the phrase to look for is that the penalty may invade principal.
Interest already credited to the account is what the penalty consumes first. Ask the bank for the exact charge in dollars as of your planned closing date — a quote in months is not a number you can compare against anything.
| Decision number | Typical value | Where it applies |
|---|---|---|
| Early-withdrawal penalty | 3-12 months of interest | Fixed-term CDs; can touch principal on short terms |
| Free exit after opening | 7 calendar days | Most new time accounts under Regulation DD |
| Grace period at maturity | 7-10 days | Before automatic renewal starts a new term |
| No-penalty CD give-up | 0.1-0.5 percentage points | Versus a comparable fixed term in normal markets |
| Savings excess-transfer fee | $5-25 per transfer | Above a bank's own six-a-month rule |
| FDIC insurance limit | $250,000 | Per depositor, per insured bank, per ownership category |
| Top 12-month CD offers | about 4.5-5.5 % APY | 2023-2024, after under 0.5 % through most of 2015-2021 |
| Compounding check | 5.00 % nominal = 5.13 % APY | Daily compounding; compare offers on APY |
Penalty anatomy, the two free windows and the break-even line — the three pictures that decide the move.