In this case I just meant you can changes the terms of the CD without paying penalties, and although I am far from a financial expert, every time I tell people about this they doubt me, so I figure many people are not aware of the ability to change terms without a financial penalty. I do it. Yes it is the regular ordinary bank CD.
I told my sister, the CPA, in another state and she told me it was not true, until she went to her bank and did it herself. I have told many friends about this, they tend to doubt it, until they do it themselves. I have never been the best investor or a financial person, but I find this useful.
The idea is not to get money out but to wring the best interest out of the account. If you can get the most in a 6 year timed deposit, but you are afraid the rate will go up in a year, I buy that higher account and if it goes up, I just have them change the CD. as if I took the money out and deposited it again - no penalty as long as I leave it in the same bank. I recently changed accounts between banks because I started to hate the bank where I had the money, I had to wait for the term to come to an end to take the money out without penalty. I have been reinvesting my IRA and Keough CDs, but have the interest from the accounts withdrawn from the IRA into my checking accounts to pay bills, this income is my taxable withdrawal for the year.
I found a link with people discussing this, they say it is on a bank by bank rule, but my banker said it was everywhere, so I always tell people to check with their bank before believing me, so far I have not found a bank that does not allow you to rolll the money over into another account, and my banks have gone through massive buy outs and now are among the largest ones. Of course this does not hold for the savings CD i have left.
http://www.bogleheads.org/forum/viewtopic.php?t=24550
Please let me know if this is more clear now or if you have found this is no longer true.
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