I wonder what the penalties are for cashing in. You probably would have to pay income taxes on all the interest incurred. If I wait long enough, I can cash in and not pay taxes.
You always pay taxes on interest earned on a CD. It is taxed as “interest income”. The only way to reduce the taxes is if it is purchased through a tax-advantaged account like an IRA or 401k.
Penalties for cashing in early are levied by the issuer and generally mean losing most or all of the gained interest and may include additional penalties beyond that depending on the terms.
