Certificates of deposit (CDs) are a great way to save money if you want a guaranteed return over the long-term.
The problem with CDs is that you make a commitment when you open one. You have to promise to keep the money that you deposit in the account for a set period of time.
Often, you’ll open a CD with a term measured in years rather than months.
When you’re waiting for such a long time before you can make a withdrawal from your CD, it’s easy to forget about the account.
What happens when you forget about a CD and how can you get your money back?
How You Might Lose an Old CD
There are a few common ways that people lose their old certificates of deposit.
1. The bank was acquired
One common way to lose track of your bank accounts, including CDs, is when a bank is acquired.
Banks are like any other business. They compete with each other, merge with each other, and buy each other out.
If your main bank is bought by another financial institution, you’ll probably know about it. The sign on your local branch will change, you might get new checks or a new debit card, and so on.
If you only have a CD at a bank that’s acquired, it’s easy to not be aware of the changes.
You might get a letter in the mail announcing the acquisition, but it’s easy to miss that kind of thing.
By the time you remember that you had a CD at the bank, you’ll go looking for a branch only to find that the bank doesn’t exist anymore.
If a bank is acquired and then the bank that bought your bank is bought by an even larger institution, things get very complicated and it can be hard to track down your money.
2. An unknown inheritance
This isn’t forgetting an old CD so much as it’s not knowing about a CD you owned in the first place, but this happens more often than you’d think.
When you open any type of bank account, including a CD, you’ll be asked to name beneficiaries.
If you pass away, the money in the account will be given to the beneficiary.
If one of your loved ones dies, it will be up to the executor of their estate to go through their bank records and wills and make sure that everyone knows about the things that have been bequeathed to them.
A relative may have left funds in a CD under your name and you couldn't be notified of it promptly.
3. You simply forgot
You open a CD with a term of a few years and stop thinking about it.
Maybe you used a different bank than usual because it offered a better rate.
Whatever causes it, many people simply forget about the CDs that they open.
What Happens to CDs that are Left Alone?
CDs are long-term bank accounts. Banks expect people to leave them alone for the most part.
This is especially true for CDs with long terms, such as 5 years.
Generally, banks will only expect to hear from CD holders when a CD matures, as that is the opportunity to make withdrawals, deposits, or other changes to the account.
At most banks, if you don’t make any changes to a CD when it matures, the bank will roll your balance automatically into a new CD.
The new CD will have the same term as the original one and earn whatever the market rate is.
Your CD could keep earning interest for years without you even knowing about it.
Eventually, the bank may try to reach out to the account holder to see why no changes have been made to the CD after multiple renewals.
If the bank isn’t able to reach you because it doesn’t have contact information or the contact information is out of date, the account will be escheated.
In the U.S., different states have different laws about escheatment.
When a CD is escheated, the state will hold it for a set period of time, giving you an opportunity to claim the account.
If you don’t claim it within a set period of time, the state will take full ownership of the funds.
What to Do If You Forgot About an Old CD?
If you realize that you’ve forgotten about an old CD, there’s a good chance that you can still get your money back.
Here are the things that you should do.
1. Call the bank
If you know the bank that held the CD, but don’t have any of the account information, just give the bank a call.
Explain the situation and provide whatever details you can:
- personal information
- when (approximately) you opened the CD
- how much you deposited
- what branch you visited to open the account
The bank may be able to track down your account using the information that you provided.
If it can’t, the person you’re working with should at least be able to point you in the right direction for the next steps that you should take.
2. Use the FDIC database
If you remember about an old CD, only to find that the bank you used doesn’t exist anymore, all is not lost.
Remember, the Federal Deposit Insurance Corporation (FDIC) guarantees bank accounts, up to a balance of $250,000 per depositor, per account type. FDIC insurance applies to CDs, so your money should still be out there.
One of the things that the FDIC does to make sure that depositors don’t lose money is to help banks acquire failing banks and take over the management of their accounts.
Depending on the bank that you used, you might find that there is a long trail of bank acquisitions, making it difficult to figure out which bank actually has your CD.
The FDIC website includes numerous tools that you can use to track the history of a bank and the banks that it merged with or was acquired by.
By following this trail, you can find the bank that has your CD.
3. Check unclaimed property databases
If it’s been a long time since you opened your CD, the bank might have informed the state that you’ve abandoned the account.
If this happens, you’ll need to get in touch with your state’s government to claim the money.
Most states operate unclaimed property websites where you can search for any unclaimed property in your name.
Check your state’s website for a database and search for your name. It can’t hurt to search for your spouse or loved ones’ names either. Maybe they have some old accounts they don’t know about.
If you find something on your state’s unclaimed property website, follow your state’s process for claiming those funds.
What If You Have an Old Paper CD?
Before much of the financial system was made electronic, financial institutions would issue paper certificates for things like stocks or CDs.
If you find an old paper CD, your best bet is to get in touch with the bank that issued it.
The bank will be able to tell you whether the account is still valid or if the money has been escheated.
Losing a paper certificate does not mean that you've lost your money.
In most scenarios, the best thing you can do is ask the bank for help. Most banks want to work with their customers and make sure that they get their money, so it can’t hurt to ask for help.
Certificates of deposit are powerful savings tools, but it’s easy to forget about them over the years.
If you realize that you’ve forgotten about a CD, your money isn’t gone for good.
Take steps to reclaim your money and keep it working for you.