CD Calculator
See exactly what a certificate of deposit will be worth at maturity. Enter your deposit, rate, term and compounding frequency to get the maturity value, total interest earned and the true APY — instantly.
Enter your CD details
New to this? Leave the defaults — they're realistic — and just change the deposit and rate.
How a certificate of deposit works
A certificate of deposit (CD) has two defining features: a fixed term and a fixed interest rate. You agree to leave a lump sum on deposit for a set period — from a few months to several years — and the bank pays a guaranteed rate for the whole term. At the maturity date, you get your deposit back plus all the interest it earned.
Because the rate is locked, a CD is predictable: you know on day one exactly how much you'll have at the end. The trade-off is access — the money is meant to stay until maturity, and taking it out early usually triggers a penalty.
CDs at FDIC-insured banks (or NCUA-insured credit unions) are protected up to $250,000 per depositor, per institution, per ownership category. That insurance plus the fixed rate makes a CD one of the lowest-risk ways to earn a known return on cash you don't need right away.
APY vs. interest rate: what's the difference?
- Interest rate (the nominal or stated rate) is the base rate used to calculate interest, before compounding.
- APY (annual percentage yield) bakes in compounding over a year, so it's always equal to or slightly higher than the stated rate.
For example, a 4.5% rate compounded monthly works out to an APY of about 4.59%. The APY is the number to use when comparing CDs and savings accounts — it reflects what you actually take home.
The formula & how we calculate it
We use the standard compound-interest formula — your deposit grown by the periodic rate, compounded each period for the length of the term.
A = maturity value (deposit + interest)
P = initial deposit
r = annual interest rate as a decimal (4.5% = 0.045)
n = compounding periods per year (daily 365, monthly 12, quarterly 4, annually 1)
t = term in years (term months ÷ 12)
APY = (1 + r / n)n − 1
Worked example (the defaults above):
- Deposit
P= $10,000, rater= 0.045. - Monthly compounding (
n= 12), 12-month term (t= 1). - Maturity: 10000 × (1 + 0.045 ÷ 12)12 ≈ $10,459.38.
- Interest = $459.38; APY ≈ 4.59%.
More frequent compounding nudges the maturity value up slightly for the same stated rate.
Early-withdrawal penalties
If you take money out before the maturity date, most banks charge an early-withdrawal penalty, usually quoted as months of interest:
- Short-term CDs (under a year): often ~3 months of interest.
- 1–3 year CDs: commonly 6 months of interest.
- Longer CDs (4–5 years): frequently 12 months or more.
Withdraw early enough and a penalty can wipe out your interest and even dip into principal. Only deposit money you're confident you won't need before maturity.
CD vs. high-yield savings account
- A CD locks your rate for a fixed term — guaranteeing your yield even if rates fall, but tying up the money until maturity.
- A high-yield savings account keeps your money fully accessible; its rate can rise when rates climb, but can also drop at any time.
Use a CD for money set aside for a known date; use high-yield savings for an emergency fund or cash you might need soon. Plenty of savers use both.
CD laddering (in brief)
A CD ladder splits your money across several CDs with staggered maturities — say, equal amounts in 1-, 2-, 3-, 4- and 5-year CDs. As each shorter CD matures you reinvest into a new long-term CD, giving you regular access to part of your money each year while still capturing the higher rates longer terms tend to pay.
Glossary
- CD (Certificate of Deposit)
- A deposit account that pays a fixed interest rate for a fixed term, returning your principal plus interest at maturity.
- APY (Annual Percentage Yield)
- The effective yearly return with compounding factored in — the number to use when comparing accounts.
- Maturity
- The end of the CD's term, when the money becomes available with all earned interest.
- Compounding
- Adding earned interest back to the balance so future interest is calculated on a larger amount.
- Term
- The length of time the deposit is committed (e.g. 12 months, 60 months).
- Early-withdrawal penalty
- A charge — usually months of interest — for taking money out before maturity.
- FDIC
- The agency that insures bank deposits up to $250,000 per depositor, per institution, per ownership category (credit unions: NCUA).
Frequently asked questions
How much interest will a CD earn?
It depends on deposit, rate, term and compounding. A $10,000 CD at 4.5% compounded monthly for 12 months earns about $459.38, for a maturity value of $10,459.38 and an APY of ~4.59%. Use the calculator for your exact numbers.
What's the difference between APY and interest rate?
The interest rate is the base rate the bank quotes. APY folds in compounding over a year, so it reflects what you actually earn and is always equal to or slightly higher than the stated rate. Compare CDs by APY.
Are CDs safe?
CDs from FDIC-insured banks (or NCUA-insured credit unions) are among the safest places for money — insured up to $250,000 per depositor, per institution, per ownership category, with a fixed, known return.
What happens if I withdraw from a CD early?
Most CDs charge an early-withdrawal penalty — typically a number of months of interest (e.g. 3 months on a 1-year CD, 6 months on a 5-year). It can eat into or exceed your interest, so only deposit money you won't need before maturity.
How is CD interest compounded?
On a schedule — commonly daily, monthly, quarterly or annually. Each time it compounds, interest is added to the balance so future interest grows on a larger amount. More frequent compounding raises the APY slightly.
CD vs high-yield savings account — which is better?
A CD locks your rate but ties up the money; a high-yield savings account stays accessible but its rate can change. Use a CD for money you won't touch and want a guaranteed rate; use savings for an emergency fund. Many savers use both.