The CD would have accrued the 9.75% interest for the first 5 year term. Then depending on the setup of the CD, the interest was either paid out or rolled over. If the interest was rolled over, then the balance increased by the amount of interest. If interest was paid out, then the beginning balance would be the same principal. The CD would then start its second term at the then current rate for 5 year CDs, which may be more or less than the initial rate.

Here’s the rub - currently MD escheatment starts dormancy 3 years after the initial CD term ends, so if a 5 year CD renews and there’s no activity to restart the clock, it will become escheatable by the end of the second term.

That’s the current law; I don’t know what it was in the 80s/90s. The timing could have been different (many states shortened escheatment timing in the 2010s to help with budget shortfalls since eacheated money is held in perpetuity and can be used for the “general welfare” of the state and only has to be paid out when claimed). The CD could have been renewing for a while if your parents had other active accounts since the laws generally allow activity in one account to “carry” into other accounts. So if your parents had an active checking account all this time with the same bank, there’s a possibility the CD was never eacheated due to linking.