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From a bank portfolio print-out, I see a CD listed:

5 Year CD
Opened: 3/24/2015
Term: 120 Months
Matures: 3/24/2025

What does it mean for a "5 Year CD" have a Term of "120 Months" and to mature after 10 years?

Is this normal? Or is this some kind of typo/error? Why call it a 5 Year CD, if its term is actually 120 Months?

When exactly does this CD actually mature from the owner's perspective? That is, when is the owner expected/allowed to liquify/take his principal + interest with no penalties (assuming no extension/rollover is desired)?

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  • I talked to the bank today (I had planned on talking to them all along, I only asked here first to make sure there wasn't something obvious I was missing). Turns out this CD was originally created at a different bank which was then subsequently bought-out by the current bank. However, the new/current bank doesn't offer CDs above 5-year term. So when the new/current bank was transferring these accounts to their system, they were mis-labelled as "5 Year CDs". Mystery solved.
    – Todd Ditchendorf
    Apr 21, 2017 at 17:43

2 Answers 2

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Is this normal? Or is this some kind of typo/error? Why call it a 5 Year CD, if its term is actually 120 Months?

I believe that this is the result of an error in your bank's statement-generation software. The term, length, and difference between opening date and maturity date should all be equal.

When exactly does this CD actually mature from the owner's perspective?

That would occur on the maturity date. In your case, it would appear that you have a 10 year CD since the term is listed as 120 months and the maturity date is 10 years after the opening date. In order to be sure, you may need to contact your bank.

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    This looks like a mislabelled 10 year
    – MD-Tech
    Apr 21, 2017 at 11:13
  • @MD-Tech you were right. See my comment above.
    – Todd Ditchendorf
    Apr 21, 2017 at 17:39
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Call the bank to find out! I suspect that the reply will be that it is a typographical error, and that the maturity date should have read 3/24/2020. Less likely is the reply that the heading should have said "10 Year CD" (unless there is a promise of the rate being adjusted during the term or the CD can be "broken" with very little penalty). At current low rates of interest, few investors would be interested in tying up their money for 10 years at low rates.

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