CD Calculator
Work out what a CD pays at maturity from its rate, compounding, and term — and get the APY, the one number that lets you compare offers fairly.
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What this calculator works out
A certificate of deposit is the simplest fixed-income product there is: one deposit, one rate, one date. This calculator turns those three facts into the value at maturity, the interest earned, and the APY — the standardised yield figure that exists so CDs with different compounding schedules can be compared on one number.
Why CDs pay more than savings accounts
The rate premium over a savings account is payment for giving up access. Your money is committed for the term; withdrawing early costs a penalty, typically several months of interest. That trade is worth making for money with a known date — a tax bill due next April, tuition due in eighteen months — and worth refusing for an emergency fund, which must stay reachable.
The certainty runs both ways: the bank cannot cut your rate when market rates fall, and you cannot benefit when they rise. A CD is at its best when you expect rates to drop, and at its worst mid-term when they have climbed.
A worked example
Deposit $10,000 in an 18-month CD at 4.5% compounded monthly. The APY works out to about 4.59%, and the certificate matures at roughly $10,697 — about $697 of interest.
Now suppose a competing bank offers 4.55% compounded annually. Its APY is exactly 4.55% — lower than the first offer despite the higher headline rate. That inversion is precisely why the APY, never the nominal rate, is the number to compare.
The fine print that changes the outcome
- Early withdrawal penalties. Commonly 3 to 12 months of interest depending on term. A penalty can eat into principal if charged before enough interest has accrued.
- Automatic renewal. At maturity most banks roll the balance into a new CD of the same term at whatever rate then applies — often far below the promotional rate you signed at. Mark the maturity date; the grace period to act is usually about ten days.
- Interest payout options. Some CDs can pay interest out monthly rather than compounding it. Taking the payout means the maturity value is just your deposit, and the effective yield is the nominal rate, not the APY.
- FDIC coverage. Deposit insurance covers up to $250,000 per depositor, per insured bank, per ownership category. Above that, spread across institutions.
Laddering: the standard compromise
Splitting a sum across CDs of staggered terms — one, two, and three years, say — is called a ladder. Something matures regularly, giving back access in instalments, while most of the money earns longer-term rates. It is the usual answer to wanting CD yields without locking everything to one date, and you can size each rung with this calculator.
See our methodology for how these tools are built and tested.
Frequently asked questions
What happens if I need the money before maturity?
You pay the bank's early withdrawal penalty, typically a set number of months of interest that scales with the term. Withdraw early enough and the penalty can exceed the interest earned, reducing your principal.
Money you might need without notice belongs in a savings account instead, even at a lower rate.
Is CD interest taxed before I receive it?
Interest is taxable in the year it is credited to the CD, even though you cannot withdraw it without penalty until maturity. On a multi-year CD you will owe tax each year on interest you have not yet been able to touch.
CDs held inside an IRA follow the IRA's tax treatment instead.
The bank quotes both a rate and an APY. Which do I enter?
Either works if entered correctly. Enter the rate with the bank's actual compounding schedule, or enter the APY with compounding set to annually — both describe the same certificate and produce the same maturity value.
What misleads is mixing them: an APY entered with daily compounding overstates the yield.
Are CD rates fixed for the whole term?
For a standard CD, yes — that certainty is the product. Exceptions exist: bump-up CDs let you raise the rate once if market rates climb, and variable-rate CDs track an index. Both usually start below comparable fixed rates, which is the price of the flexibility.
Is a CD better than a high-yield savings account?
They answer different questions. A CD pays a known amount on a known date and locks the money; savings pays a floating rate and stays accessible. Fixed dates favor the CD; uncertain needs favor savings. Many people sensibly hold both.
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This calculator is provided for general educational and estimation purposes only. It does not constitute financial or investment advice. Early withdrawal penalties, promotional terms, and renewal conditions vary by bank and are not modelled. Confirm the rate, APY, and terms in the bank's disclosure before opening a CD.