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Although there can be financial penalties for withdrawing a certificate of deposit early, making an investment decision has no effect on your credit. Credit scores are only affected by how you handle your credit accounts such as car loans, credit cards or a home mortgage.

2 Typically, you'll have three options: Roll the proceeds into a new CD at that institution. You can opt for a CD with the same term as your old one or a term that's shorter or longer. Transfer the funds into another account at that bank.Withdraw the proceeds.

CD TermEarly-Withdrawal Penalty3-12 months3 months interest12-24 months6 months interestMore than 24 months12 months interestMinimum penalty amount$251 more row

Unlike the stock market or IRAs which can lose money, you cannot lose money in a CD. There is actually no risk the account owner incurs unless you withdraw money before the account reaches maturity. In this case, the early-withdrawal penalty could eat up some or all of the interest earned.

Compared to stocks or other securities, CDs are a relatively safe investment since your money is held at a bank. The biggest risk to CD accounts is usually an interest-rate risk, as federal rate cuts could lead banks to pay out less to savers. Bank failure is also a risk, though this is a rarity.

A CD early withdrawal penalty consists of interest earned in a CD over several months, or in some cases beyond a year. The exact amount varies based on the bank and the CD term; typically the longer the CD term, the bigger the penalty is. Plus, the earlier you withdraw money from a CD, the less interest you'll earn.

CDs are one of the safest ways to store money and earn a set rate of interest, which can help you better plan your finances. CDs opened at FDIC-insured banks or credit unions backed by the NCUA are guaranteed by the federal government.

It's like making a promise to the bank for that length of time. If you withdraw money from the CD before the term is over, you're breaking the promise you made to keep your money in the account. For breaking that promise, you usually have to pay a fee called an early withdrawal penalty.

CD TermEarly-Withdrawal Penalty3-12 months3 months interest12-24 months6 months interestMore than 24 months12 months interestMinimum penalty amount$251 more row

A CD early withdrawal penalty consists of interest earned in a CD over several months, or in some cases beyond a year. The exact amount varies based on the bank and the CD term; typically the longer the CD term, the bigger the penalty is. Plus, the earlier you withdraw money from a CD, the less interest you'll earn.