How to use the CD calculator
- Enter the deposit, the amount you put into the CD.
- Choose whether the bank quotes the rate as an APY or as an interest rate (APR). Most US banks advertise the APY.
- Enter the rate. If it is an interest rate, also choose how often it compounds.
- Enter the term in months, such as 6, 12, 24 or 60.
- Optionally, enter your tax rate to see the interest you keep.
The results show the value at maturity, the interest earned, the APY and a month-by-month (or year-by-year, for long terms) table of growth.
How a CD's value is calculated
P is the deposit, r the annual interest rate as a decimal and k the number of times it compounds each year (365 for daily, 12 for monthly). The APY already includes compounding, so when you have it you don't need to know the compounding frequency at all. The calculator assumes the interest stays in the CD until maturity, which is how most CDs work.
Worked example
The calculator's defaults are $10,000 in a 12-month CD at 4.00% APY.
- Twelve months is exactly one year, so the value at maturity is $10,000 × 1.04^1 = $10,400.00.
- Interest earned: $10,400.00 − $10,000 = $400.00.
If the bank instead quoted a 4.00% interest rate compounded daily, the CD would be worth $10,000 × (1 + 0.04 ÷ 365)^365 = $10,408.08, because daily compounding turns 4.00% into an APY of 4.081%. That is why comparing APYs, not rates, is the fair way to compare CDs. With a 24% tax rate, the $400.00 of interest leaves you $304.00.
$10,000 at 4.00% APY for different terms
| Term | Value at maturity | Interest |
|---|---|---|
| 6 months | $10,198.04 | $198.04 |
| 12 months | $10,400.00 | $400.00 |
| 18 months | $10,605.96 | $605.96 |
| 24 months | $10,816.00 | $816.00 |
| 36 months | $11,248.64 | $1,248.64 |
| 60 months | $12,166.53 | $2,166.53 |
In practice, banks pay different rates for different terms, so compare the APY each term actually offers. A longer term locks in today's rate, which helps if rates fall and costs you if they rise.
Early withdrawal, safety and tax
Early withdrawal penalties. Most CDs charge a penalty if you take money out before maturity, commonly a set number of months of interest, and longer terms usually carry bigger penalties. Read the penalty in the account terms before you open the CD, and keep money you might need soon in a savings account instead. No-penalty CDs exist but usually pay a lower rate.
Deposit insurance. CDs at FDIC-insured banks are covered up to $250,000 per depositor, per insured bank, for each account ownership category, according to the FDIC. Credit union certificates have similar coverage through the NCUA.
Tax. The IRS lists interest on certificates of deposit as taxable interest that you must report, even if you don't receive a Form 1099-INT (IRS Topic 403).
Frequently asked questions
What is the difference between a CD's APY and its interest rate?
The interest rate is the yearly rate before compounding. The APY is what you actually earn in a year once interest is added to the balance and starts earning too. A 4.00% rate compounded daily gives a 4.081% APY; compounded monthly it gives 4.074%.
Is CD interest paid monthly or at maturity?
It depends on the bank. Many CDs credit interest monthly or quarterly and leave it in the CD to compound; some pay it out to another account. If the interest is paid out, it no longer compounds, so the total is closer to simple interest. This calculator assumes it stays in the CD.
Can a CD lose money?
The deposit in an insured CD is protected up to the insurance limit, and the rate is fixed for the term. You can end up with less than you put in only if an early withdrawal penalty is larger than the interest earned so far, or in real terms if inflation runs above the APY.
How do I compare a CD with a high-yield savings account?
Compare APYs over the same period. A CD fixes its APY for the term, while a savings account's rate can change at any time but leaves your money available. The savings calculator projects a savings account with regular deposits.
Related calculators
- Savings Calculator — How a savings account grows with regular deposits that rise each year, at your APY and after tax.
- Interest Calculator — Interest earned on a balance with regular deposits, any compounding, tax on interest and inflation.
- Compound Interest Calculator — How a starting balance and monthly contributions grow, with any compounding frequency.
- Inflation Calculator — What money will cost in the future, and what today's savings will really be worth.
Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.