CDs (or certificates of deposit) are low-risk savings vehicles offered by banks, credit unions and many other financial institutions.
Individuals can commit a certain amount of money for a specific period of time, and the issuing bank commits to paying a specified rate of interest.
CDs generally have terms ranging from a few months to several years, and usually offer higher yields than savings accounts. But with over $1 trillion in CDs maturing in 2025, investors have some big decisions to make.
How Much Is $1 Trillion?
Humans have a hard time wrapping their heads around the concepts of large numbers. A common saying is that the difference between a million dollars and a billion dollars is…about a billion dollars. One million seconds is about 11 and a half days. One billion seconds is a thousand million seconds, which is over 31 years. A TRILLION seconds is a thousand billion, which is over 31,688 years. Hopefully these numbers help put into perspective the sheer number of dollars that we are talking about.
The Growing Popularity of CDs: Why $1 Trillion Matters
While CDs have always provided a low-risk way to save for the future, they have become more popular in recent years due to higher interest rates. When rates were lower, CDs were not as popular. CD rates are usually tied to the Federal Funds Interest Rate, which is set by the Federal Reserve, and fluctuates. When the Federal Funds Rate is low, CD rates also tend to be low.
While CDs come with varying maturity dates, $1 trillion in CDs are maturing in 2025. With these CDs maturing, all of this money will be making its way back into the financial system. As such, it's important to be aware of what that means and how it might affect you.
What Happens When CDs Mature
When CDs mature, investors face choices about what to do with their money. This could include reinvesting in new CDs, moving funds to higher-yield options, or withdrawing it for other uses. Deciding what to do with any money that you have in a CD that matures will depend on a number of different factors, most crucially any immediate need you have for that money and your overall financial goals.
Mary Grace Roske, the Chief Operating Officer of CD Valet, a CD comparison tool, had this to say about the current state of CDs:
"CD rates vary widely in the current environment. Questions about economic policies from taxes to tariffs to inflation to immigration have financial institutions feeling uncertain about their pricing strategies and as a result, CD rates today really run the gamut.
Savers who shop will be rewarded with higher rates, especially by many community banks and credit unions. Longer-term CDs are also more attractive now, with the yield curve first flattening [and] steepening as long-term rates started rising in September 2024."
Market Implications of $1 Trillion in Maturing CDs
The decisions that you make with any money in a maturing CDs not only can affect your personal finances but can contribute in part to the broader economy. While you might not think that the decisions that you make with your CDs might have broader macroeconomic effects, they can play a part in the larger economy. An influx of money from maturing CDs has the possibility to influence interest rates, bank liquidity, and market trends in 2025.
As CDs mature, banks may have to compete to attract money from savvy consumers by offering incentives, including bank bonuses and higher interest rates. Alternatively, if consumers decide to move their money out of the banking industry to alternative investments, this could strain the liquidity at some banks, which might force them to adjust their lending practices.
While it's too early to know how this transition might play out, it's worth keeping an eye on to see how it might impact various asset classes and how it might play out in the broader financial market.
How to Prepare for 2025’s CD Maturity Wave
As we enter 2025, one of the best things that you can do is review your overall financial goals. Making sure that you have a firm grasp of your overall financial strategy can help guide your investment decisions if you have a CD that is maturing in 2025. Consider whether your priority is liquidity, income, or long-term growth, and align your strategy accordingly.
If you do have a CD that is maturing in 2025, make sure to compare alternative investments, such as high-yield savings accounts. You may find that HYSAs can give you returns similar to those of CDs without having to tie up your money for a set period of time. That increased liquidity can provide more flexibility, helping you to better reach your financial goals. Other investments like Treasury bonds, stocks or diversified portfolios may be good options to consider. Consult a qualified financial advisor if you're not sure about what the right move is for your specific situation.
The Bottom Line
One trillion dollars is a lot of money, and with that much money in maturing CDs hitting the market in 2025, it could represent a pivotal moment for both individual investors and the broader financial market. With such a significant amount of money reentering the system, the choices made by millions of CD holders could affect interest rates, bank liquidity, and investment trends.
For those with maturing CDs, this is a unique opportunity to reassess financial priorities and explore alternatives that align with your goals. Whether you choose to reinvest, pursue more flexible options, or seek higher returns elsewhere, being proactive and informed will be key to navigating this transition. As the financial landscape evolves, smart decisions today can set the stage for greater stability and growth tomorrow.
Editor: Colin Graves Reviewed by: Robert Farrington
Dan Miller is a personal finance writer who has been covering credit cards, student loans, investing, and all things money since 2013. His work has appeared in NerdWallet, Forbes, Business Insider, Rocket Mortgage, and Intuit Mint, among many others, and his family’s savvy use of credit card rewards has even been featured on CBS News.
At The College Investor, Dan covers the topics that matter most to families navigating their financial lives: student loan repayment strategies, smart credit card use, budgeting, investing, and building long-term wealth. His writing is grounded in the belief that small financial decisions compound over time — a philosophy he lives out at home in Cincinnati, where he raises six kids with his wife and finds creative ways to stretch every dollar.
Dan is also the founder of PointsWithACrew.com, a site dedicated to helping families travel the world for free (or close to it) using airline miles and credit card points.