Is there a CD penalty for withdrawing money at an early age?

1 answer | Last updated: Jul 24, 2009
A fellow caregiver asked...

I am 55 and my husband is retired and 62. He retired two years ago and received a lump sum and has put it into a CD. He listed me as POD. If he dies can I get any of this money without paying penalty for being less than 62 years old?

Expert Answers

Barbara Repa, a senior editor, is an attorney, a journalist specializing in aging issues, and the author of Your Rights in the Workplace (Nolo), now in its 10th edition.

The answer is an encouraging but ungrammatical one: very probably yes.

Nearly every institution that establishes and holds CDs writes the condition into its terms that the principal may be withdrawn without penalty if the maker of the CD dies or becomes incompetent—although that condition very often appears in long-winded legalese.

If you do not have access to the paperwork connected to the CD but you know where it is held, you may be able to research this on your own, online. Simply search for the bank or other institution, and the words “certificate of deposit” or “terms and conditions” or “application disclosure.”