Where does CD interest live?

[Brook2]

I have about $300 of return on a CD in my credit Union and will continue to accumulate more over time. I assumed I could just transfer that interest into my CR checking account, but they won't let me do that online. I have to do it with a representative.

Is this normal? Where does CD interest usually "sit". It doesn't appear to be in any kind of separate cash account - it shows up on my CD account as a separate line under my CD amount. It is not 'movable'. So where is it actually?

That seems odd to me...but I'm somewhat new to CDs

 

[audreyh1]

Usually when you open a CD at a bank or credit union they give you a few options for what to do with the interest. One is to have the interest transferred to you whenever it is paid. Otherwise it is retained in the CD and compounds at the CD rate.

The transfer options given may be check mailed to you or transferred to another account including external accounts. I usually have a savings or checking account at institutions where I buy CDs as those are useful for holding proceeds from matured CDs, etc. Then I transfer to and from another institution.

 

[Jerry1]

That seems odd to me...but I'm somewhat new to CDs

Seems odd to me too. My experience has been that once paid, the interest sits in a savings or checking account. Similar to a broker, it goes into a cash account.

 

[RetiredAndLovingIt]

It's the normal default for the monthly interest to be reinvested in the CD but you can call them and ask them to make the change to have future interest deposited in your checking account each month moving forward.
Keep in mind that the APY you were quoted assumes reinvested interest.

https://www.investopedia.com/terms/a/apy.asp

 

[CincyDave]

It's the normal default for the monthly interest to be reinvested in the CD but you can call them and ask them to make the change to have future interest deposited in your checking account each month moving forward.
Keep in mind that the APY you were quoted assumes reinvested interest.

https://www.investopedia.com/terms/a/apy.asp

This is all I've ever done. Didn't even know there were other options

 

[jazz4cash]

It's the normal default for the monthly interest to be reinvested in the CD but you can call them and ask them to make the change to have future interest deposited in your checking account each month moving forward.
Keep in mind that the APY you were quoted assumes reinvested interest.

https://www.investopedia.com/terms/a/apy.asp

I agree and it's what most of us want. Locking in the interest rate for bank CDs is especially rewarding now sine we expect rates to drop in the future. Also, if you are new to CD's the compounding frequency matters. Brokered CDs do not compound so the interest is paid to a core account.