How to use the CD Calculator
- 1 Enter the deposit you plan to put in the CD.
- 2 Enter the APY (annual percentage yield) from the bank's offer.
- 3 Enter the term in months, for example 6, 12 or 60.
- 4 Read the interest earned and the value at maturity.
Worked example
$10,000 in a 12-month CD at 4.25% APY. The value at maturity is $10,000 × 1.0425 = $10,425.00, so you earn $425.00 of interest. Over 24 months at the same APY it would grow to about $10,868, because the second year earns interest on the first year's interest.
Features
Uses APY
APY includes compounding, so the result is accurate whatever compounding the bank uses.
Any term
Short 3-month CDs to 5-year CDs, entered in months.
Compare offers
Try two banks' APYs side by side to see the dollar difference.
When to use it
Choosing a term
Compare a 12-month and a 24-month CD to see if the higher rate is worth locking up money.
CD ladders
Work out the value of each rung of a ladder with different terms.
Savings versus CD
Compare a CD with a high-yield savings account at a similar rate.
Short-term goals
Park money for a known date, such as a tax bill or a tuition payment.
Frequently asked questions
What is APY?
Annual percentage yield is the yearly return including compounding. It lets you compare accounts that compound differently.
What is the difference between APY and APR?
APR is the simple yearly rate; APY adds the effect of compounding. For savings, compare APYs.
Is CD interest taxed?
Yes, CD interest is generally taxable in the year it is earned, even if it stays in the CD until maturity.
What happens if I withdraw early?
Most CDs charge an early withdrawal penalty, often several months of interest. Check the terms before you open one.
Are CDs insured?
CDs at FDIC-insured banks and NCUA-insured credit unions are covered up to the standard insurance limit per depositor, per institution, per ownership category.
What is a CD ladder?
Instead of one large CD, you split the money across CDs that mature at different times, for example 1, 2 and 3 years. You get regular access to part of your money while still earning longer-term rates.
What happens when a CD matures?
You usually get a grace period of about a week or two to withdraw the money or move it. If you do nothing, many banks renew it automatically at the current rate.
Are CD rates fixed?
Most CDs have a fixed rate for the whole term, so your return is known in advance. Some special CDs, such as bump-up or step-up CDs, can change.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated