Can You Withdraw Money From a CD Early? What It Will Cost You

You probably opened your certificate of deposit expecting to leave it alone until maturity. Then life changed.

Maybe your car needs a major repair. Maybe you're buying a home sooner than expected. Or maybe an unexpected opportunity makes using your savings today more valuable than waiting a few more months.

If you're wondering whether you can withdraw money from a CD before it matures, the answer is usually yes. The more important question is whether doing so makes financial sense. Most certificates of deposit charge an early withdrawal penalty – but that doesn't automatically mean breaking your CD is the wrong decision.

Before deciding whether to withdraw your money early, it’s worth understanding exactly how CD penalties work—and whether paying one is actually as costly as many people assume.

Key Takeaways

• Most CDs allow early withdrawals, although an early withdrawal penalty usually applies.
• Penalty amounts vary by financial institution and CD term.
• Paying a penalty may still make financial sense in certain situations.
• Choosing the right CD term upfront reduces the likelihood you'll need to withdraw early.
• Eligible deposits at FDIC-insured banks are protected up to applicable limits.

Can You Withdraw Money From a CD Before Maturity?

In most cases, yes. Banks generally allow customers to withdraw funds before a certificate of deposit reaches maturity. Doing so usually triggers an early withdrawal penalty that reduces some or all of the interest earned. The exact penalty depends on the financial institution and the terms of your account agreement.

Why Do CDs Have Early Withdrawal Penalties?

Certificates of deposit typically pay higher rates because you agree to leave your money on deposit for a set time period, called the term. Early withdrawal penalties help offset the cost when that agreement changes. Every bank establishes its own penalty schedule, which is why reviewing the Truth in Savings disclosure before opening a CD is important.

Current OMB Bank Early Withdrawal Penalties

At OMB Bank, early withdrawal penalties are based on the amount of interest the CD would have earned if it had remained on deposit until maturity – not how long you’ve owned the CD. That means the penalty is predetermined when you open the account and doesn’t increase over time.

Example: Breaking a 13-Month CD Early

Imagine you opened a $25,000 13-month CD but six months later needed the money for an unexpected expense. Under OMB Bank's current disclosure, the penalty would generally equal 195 days (6½ months) of interest, regardless of when during the term the withdrawal occurs.

Whether withdrawing early makes sense depends on your circumstances. If paying the penalty helps you avoid high-interest credit card debt or expensive financing, it could still be the less costly decision. That’s why it’s usually worth comparing the penalty with the cost of your alternatives instead of assuming withdrawing early is automatically a bad financial decision.

Should You Break Your CD?

Ways to Reduce the Chances You'll Need to Break a CD

• Choose a CD term that matches when you’ll need the money.
• Build a CD ladder so portions of your savings mature at different times.
• Keep an emergency fund separate from long-term savings.
• Consider a no-penalty CD if one becomes available and fits your goals.

Related Guides

Planning ahead can help you avoid early withdrawal penalties altogether. These companion resources can help:

• Is a 3-Month CD Worth It?
• Should You Lock in Today's Rate for Longer?
• How Much Interest Could a $25,000 CD Earn?
• How to Build a CD Ladder

Frequently Asked Questions

Does breaking a CD always mean losing money?

No. Many customers still receive their principal and some interest. The outcome depends on the timing of the withdrawal and the applicable penalty.

Can an early withdrawal penalty reduce principal?

Yes. If accrued interest is insufficient to satisfy the penalty, the remaining amount may be deducted from principal, as described in OMB Bank's Truth in Savings disclosure.

Is there ever a good reason to break a CD early?

Yes. Unexpected expenses or avoiding higher borrowing costs may justify paying the penalty depending on your situation.

Can I withdraw money from a CD without paying a penalty?

Traditional CDs generally charge an early withdrawal penalty. Some banks occasionally offer no-penalty CDs with different terms and restrictions.

Explore Your Options

Understanding early withdrawal penalties before opening a CD can help you choose a term you'll feel comfortable keeping until maturity. Compare current OMB Bank CD rates, estimate your earnings with our CD calculator or open a CD online with just a few clicks. If you'd like guidance choosing the right term, visit any convenient OMB Bank branch.

Last reviewed: July 2026

OMB Bank and its affiliates do not provide legal, tax or accounting advice. Consult your advisors before making financial decisions.