CD Calculator
Work out what a certificate of deposit will be worth at maturity. Enter your deposit, interest rate, term, and compounding to see the value, interest, and APY.
🏦 What is a CD Calculator?
A CD calculator works out what a certificate of deposit will be worth when it matures. You enter the amount you deposit, the annual interest rate, the length of the term, and how often interest compounds, and it applies the compound interest formula to return the maturity value, the interest earned, and the effective annual yield. It turns a bank's quoted rate into the actual figure you will have at the end of the term.
Certificates of deposit, known as fixed deposits in many countries, are a popular low-risk way to earn a guaranteed return on cash you do not need immediately. Savers use them to park an emergency buffer, to lock in a rate before rates fall, or to build a CD ladder that keeps some money maturing regularly. Because the rate is fixed and the return is predictable, a quick calculation lets you compare offers from different banks and decide whether a longer term is worth the extra yield.
A common misconception is that a 5% CD simply pays 5% of your deposit. In fact compounding means you earn slightly more, because interest is added during the term and then earns interest itself. This is why the annual percentage yield, or APY, is a little higher than the nominal rate. Another misconception is that CD money is freely accessible; most CDs charge a penalty for withdrawing before maturity, so the funds should be genuinely spare.
This calculator uses the standard formula A = P(1 + r/n)^(nt), supporting compounding from annual to daily. It reports the maturity value, the interest earned over the term, and the APY, with the full working shown so you can see exactly how the deposit grows.
📐 Formula
📖 How to Use This Calculator
Steps
💡 Example Calculations
Example 1 — One-Year CD
10,000 at 5% compounded monthly for 1 year
Example 2 — Three-Year CD, Daily Compounding
5,000 at 4.5% compounded daily for 3 years
Example 3 — Five-Year CD, Quarterly
25,000 at 5.25% compounded quarterly for 5 years
❓ Frequently Asked Questions
🔗 Related Calculators
What is a certificate of deposit (CD)?
A certificate of deposit is a savings product from a bank or credit union that pays a fixed interest rate in exchange for leaving a lump sum untouched for a set term, such as 6 months, 1 year, or 5 years. In return for locking the money away, a CD usually pays a higher rate than an ordinary savings account. Withdrawing early typically triggers a penalty.
How do you calculate CD interest?
Use the compound interest formula A = P(1 + r/n)^(nt), where P is the deposit, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the term in years. For a $10,000 CD at 5% compounded monthly for 1 year, A = 10,000 × (1 + 0.05/12)^12 = $10,511.62, so the interest earned is $511.62.
What is APY on a CD?
APY, or annual percentage yield, is the real rate of return once compounding is included. It is calculated as (1 + r/n)^n − 1. A 5% nominal rate compounded monthly gives an APY of about 5.12%, slightly higher than 5% because interest earns interest during the year. Comparing CDs by APY rather than the nominal rate gives a fair comparison.
What is the difference between APR and APY?
APR (annual percentage rate) is the nominal rate without compounding, while APY (annual percentage yield) includes the effect of compounding within the year. APY is always equal to or higher than APR for the same rate. Banks quote APY on savings and CDs because it reflects what you actually earn, and it is the correct figure for comparing products.
How does compounding frequency affect a CD?
The more often interest compounds, the more you earn, because interest starts earning its own interest sooner. Daily compounding yields slightly more than monthly, which yields more than annual, for the same nominal rate. The difference is modest: a 5% rate gives an APY of about 5.116% monthly versus 5.127% daily, but over large sums and long terms it adds up.
What happens if I withdraw from a CD early?
Most CDs charge an early withdrawal penalty, commonly between three months and a year of interest depending on the term. This can eat into or even exceed the interest earned, and in some cases reduce your principal. Because of this, only put money in a CD that you are confident you can leave for the full term.
Are CD returns guaranteed?
The interest rate on a fixed-rate CD is guaranteed for the term, and deposits at insured banks and credit unions are protected up to the applicable limit, so CDs are considered very low risk. The main risks are inflation eroding the real value of your return and the opportunity cost if rates rise after you lock in.
How much will a $10,000 CD earn?
It depends on the rate, term, and compounding. A $10,000 CD at 5% compounded monthly earns $511.62 in one year, reaching $10,511.62. At 4.5% compounded daily over three years it grows to about $11,445, earning around $1,445. Enter your own figures into the calculator to see the exact maturity value and interest.
What is a CD ladder?
A CD ladder is a strategy of splitting your money across several CDs with staggered maturity dates, for example one-year through five-year terms. As each CD matures you reinvest it into a new long-term CD. This gives you regular access to a portion of your money while capturing the generally higher rates offered on longer terms.
Is CD interest taxable?
Yes, in most jurisdictions CD interest is taxable as ordinary income in the year it is credited, even if you do not withdraw it until maturity. Your bank reports the interest to the tax authority. Holding a CD inside a tax-advantaged account, where available, can defer or shelter that tax, improving your net return.