Should I renew my upcoming CD or liquidate? That is a tough question, and it comes down to your particular situation. In today’s troubled economic times, you have to watch your budget closer than ever, and any influx of cash is always helpful. The key is to make sure you don’t hurt yourself more in the long run by liquidating a stable asset.

CD’s or certificates of deposit are a well known, and very safe investment strategy. CD’s are investments with a predetermined interest rate over a predetermined time period, also known as the maturity period. The CD rates vary from one financial institution to another, but the principle is the same in that you invest a sum of money over time and the financial institution pays you based on the CD interest rate.

Liquidating a CD is a great pay off, but if you can stand to leave the investment active you can renew the CD and continue to earn with a very stable platform. Since the stock market does not affect the CD rate, certificates of deposit are a great anchor in uncertain economic times. The CD rates are generally proportional to the amount invested and the length of time to mature. Many options are available, and one very popular strategy is to invest in a CD that gives the option of adding on to the original investment. Each time the CD matures, you renew with slightly larger investment, and therefore continually increase your pay outs and overall investment worth.

On the other hand, liquidating your certificate of deposit at the right time is also a very effective strategy. Most financial institutions have CD’s that pay out monthly, quarterly or yearly and provide a steady source of income during the maturity period. Once the CD has matured, you simply cash it out. Because the certificate of deposit is so stable, you have the peace of mind that your investment will pay off in a designated time frame. The only downside to this is that CD rates can and will fluctuate, so locking into the best CD rate is paramount, and will need to be carefully researched each time.