Q. Four years ago I invested $39,000 in a five-year CD. The interest rate is only 3.5%. Should I cash it in and pay the penalty (three months interest) and reinvest at say an interest rate of 5%, or would it be better hang in there?

A. Stick it out. You should be able to take advantage of higher rates when your CD matures next year.

We calculate that your current CD should be worth about $44,852 now (depending on how it is compounded). That means that by the end of the fifth year, your CD will be worth $46,447 -- a gain of $1,595 in the fifth year.

If you pay three months interest in a penalty, that should be $787, you would cash your CD in for $44,065 (the current value of $44,852 less the $787 penalty). If you put the $44,065 in a 5% CD, your annual interest would be $889 and the total value of your investment at the end of the five-year period would be $44,954, or almost $1,500 less than sticking it out with your original CD.

When it comes time to reinvest, use our extensive database to find the best CD rates.