General Finance
CD Calculator
Enter your deposit, the CD's APY, the term, and how often it compounds to see what the certificate will be worth at maturity and how much interest it earns.
Calculation inputs
Banks quote CDs by APY, which already includes compounding. The compounding setting shows the matching nominal rate.
Results
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Complete the fields and select Calculate to show results here.
About this calculator
This calculator shows what a certificate of deposit will be worth when it matures, based on the deposit, APY, term, and compounding frequency. It is useful for comparing CD offers or deciding between a CD and a high-yield savings account.
How the calculation works
- Maturity value = deposit × (1 + APY)^years
- Interest earned = maturity value − deposit
- Nominal rate = n × ((1 + APY)^(1/n) − 1)
Notes and assumptions
APY is the effective yearly yield after compounding, which is why it is the fairest way to compare CDs.
CD interest is generally taxable as ordinary income in the year it is credited, even if you do not withdraw it.
How it works in plain English
Banks advertise CDs by their annual percentage yield, or APY. APY is the effective yearly return after compounding, so it already includes whether interest is added daily, monthly, or quarterly. That makes the maturity value simple: grow the deposit by the APY for each year of the term, including fractions of a year for terms quoted in months.
The interest earned is the maturity value minus the deposit. The tool also shows the total return over the whole term as a percentage, which is lower than the APY for terms under a year and higher for multi-year CDs.
The compounding setting converts the APY into the matching nominal rate (sometimes called the interest rate or APR on a disclosure). Two CDs with the same APY pay the same amount regardless of compounding, which is why APY is the fairest comparison. The result assumes you leave the money in until maturity; early withdrawal penalties and tax on interest are not included.
The formula
- Maturity value = deposit × (1 + APY)^years
- Interest earned = maturity value − deposit
- Nominal rate = n × ((1 + APY)^(1/n) − 1), n = compounding periods per year
Worked example
Suppose you deposit $10,000 in a 12-month CD paying 4.25% APY, compounded daily.
After one year the CD is worth $10,000 × 1.0425 = $10,425, so you earn $425 in interest. The equivalent nominal rate with daily compounding is about 4.16%.
If you chose an 18-month CD at the same APY instead, the term is 1.5 years: $10,000 × 1.0425^1.5 ≈ $10,644.23, or about $644 of interest — a total return of 6.44% over the term.
Interest earned on $10,000
| APY | 6 months | 1 year | 3 years | 5 years |
|---|---|---|---|---|
| 3.00% | $149 | $300 | $927 | $1,593 |
| 4.00% | $198 | $400 | $1,249 | $2,167 |
| 4.50% | $223 | $450 | $1,412 | $2,462 |
| 5.00% | $247 | $500 | $1,576 | $2,763 |
Source: calculated with the compound growth formula using the APY shown.
Frequently asked questions
What is the difference between APY and APR on a CD?
APY includes the effect of compounding and shows the effective yearly yield. The nominal rate, or APR, does not. A CD with a 4.16% rate compounded daily has an APY of about 4.25%. Compare CDs by APY so different compounding schedules do not mislead you.
Does compounding frequency change my earnings?
Not if you already know the APY, because APY bakes compounding in. Compounding only matters when you are given a nominal rate: at the same nominal rate, daily compounding earns slightly more than monthly or annual compounding.
What happens if I withdraw early?
Most CDs charge an early withdrawal penalty, often several months of interest, which this tool does not include. Some banks offer no-penalty CDs with slightly lower yields. Check the account disclosure before opening a CD you might need to break.
Is CD interest taxable?
Generally yes. In the US, CD interest is taxed as ordinary income in the year it is credited to the account, even if it stays in the CD until maturity. CDs held in an IRA follow that account's tax rules instead.
Are CDs insured?
CDs at FDIC-member banks are insured by the FDIC, and those at federally insured credit unions by the NCUA, up to $250,000 per depositor, per institution, per ownership category.
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