Bank CD, how to cash?

I bought CD's about 15 years ago. There are two names on th e account mine and another family members. I have a certificate with an amount on them for the CD's. What I am trying to figure out is can I go to any bank and cash them or do I have to go to the bank where the CD was established. Also do you get

I bought CD's about 15 years ago. There are two names on th e account mine and another family members. I have a certificate with an amount on them for the CD's. What I am trying to figure out is can I go to any bank and cash them or do I have to go to the bank where the CD was established. Also do you get some kind of form when you cash a CD for your taxes? I opened the CD's so does the other person have to sign to cash them?

Best Answer:

Parr: It sounds as though you're referring to the rule that financial institutions must report transactions over $10,000 to the federal government. This is to discourage money laundering via large transfers of cash. Find out the rules by calling up one of your local banks. If you don't completely understand the answers, call another bank for additional information.

In general, I believe you can deposit amounts under the reporting ceiling at any time. The account will earn interest, of course, and that interest will be automatically reported to the IRS. You'll get a form called a 1099-INT soon after January 31st showing the amount. You must report this on your income tax return, since the IRS will match your return to their records.

If there's a huge discrepancy between the amount you report as income versus the amount you receive in interest, the Feds might wonder why. One way around this would be to put some of your money into US Savings Bonds (there are several types). They earn decent interest, but you don't have to declare the interest until you cash them in, some years in the future. Then, of course, you have to pay tax on all the accumulated interest, but by then your situation may be entirely changed.

You can buy US Savings Bonds through most banks. They will explain all about savings bonds and the rules about cashing them in (there's a waiting period). I believe the interest is credited every three months, so you want to be careful about when you cash them in. You could lose three months' interest if you cashed them in a day too soon.

Other answer:

Parr:
I will answer a bit at a time. You have to go back to the bank that gave you the certificate of deposit (CD). If you went to another bank, that would be like loaning your brother 10 dollars and then going to a stranger and asking for your ten dollars back.

If the CD has been paying you interest regularly (every 3 month, yearly etc.) then at the end of the year, the bank will send you a 1099 INT. This is the form they send to the IRS to report the interest income that you earned during the year. However, some CD's don't pay interest until maturity so you may not get one until you actually take the money out or "realize" your earnings. Example: You loan your friend 100 dollars and your friend gives you a note that says..at the end of the year, i'll give you your money back plus 10%. At the end of the year your friend gives you an option. Take your money back ($100) plus the 10% interest ($10) (total $110), or "roll it over" which is to renew the contract but this time, the loan amount is $110 at 10% interest. Next year same thing but you get $11 dollars in interest. This is called compounding interest by the way. So it depends on when you get your earnings.

If the CD has two names on it, then yes, BOTH will have to sign to cash it out unless when you opened the CD account the paperwork specifically states that it is o.k. for only one of the named owners to withdraw funds. OH, if it was a custodial account, meaning you opened it for the benefit of somebody else like a grandchild for college, then in most states, the funds are actually the childs, not yours and is considered a gift. In that case, since you are the custodian, you could take it out but if you didn't eventually return the funds to the child, the child could sue you for those funds when they are at an age of maturity for theft, or failure to act as a fiduciary.

Hope that helps.

PS. Leaving a CD in an account for 15 years is probably one of the dumbest things you could do because the interest you receive does not outpace inflation and if you are rolling that CD over after interest rates have dropped, (like now, at less than 1%), then your money isn't working for you at all. Sure you still have it at the end of the day and it is insured by the FDIC, but what does it buy? Example. Put a dollar bill under your mattress with a list of things you would like to buy with that dollar bill (pack of gum, 20oz. soda, whatever) Then in 25 years take that dollar bill out plus your extra .25 cents in interest and go see what you can buy with it. Nothing because a pack of gum is 1.50 and a soda is 2.00.

Jeff T:
You, and everyone else whose name is on that CD, need to go to the bank where you bought it. You will get a form showing that the interest earned is income.
Ricki:
Why don't you go to the bank and ask them or phone them?

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