Short-term savings
6-month CD for a house deposit
You park $25,000 in a 6-month CD at 4.40% APY while you house-hunt.
- Half a year:
t = 6 ÷ 12 = 0.5 $25,000 × 1.044^0.5 ≈ $25,544.08
$25,544.08 at maturity: $544.08 of interest.
FinanceFree online calculatorAPY or interest rate
CD Calculator
Use this CD calculator to see how much a certificate of deposit will be worth at maturity. Enter the APY or interest rate, compounding and term, then compare two CDs or estimate early withdrawal penalties and tax.
CD Calculator
Certificate of deposit growth
Value at maturity
2 years$11,025.00
After 2 years, your $10,000.00 deposit grows to $11,025.00, earning $1,025.00 of interest before tax.
- Total interest
- $1,025.00
- Term
- 2 years
- APY
- 5%
- Interest rate (monthly)
- 4.889%
- You entered an APY, so compounding doesn’t change the maturity value — it only sets the equivalent interest rate (4.889% compounded monthly).
CD value over time
Includes interest accrued to each month-end.
Growth table
5% APY on $10,000.00, before tax and penalties.
| Year | Interest earned | Value at end |
|---|---|---|
| 1 | $500.00 | $10,500.00 |
| 2 | $525.00 | $11,025.00 |
| Total | $1,025.00 | $11,025.00 |
On this page
Guide
How to Use the CD Calculator
Enter the CD’s details for its maturity value, then add a second CD, a penalty or tax to test the scenarios that matter to you.
Enter your deposit
The amount you plan to put into the certificate of deposit. Change the currency if you save in pounds, euros, Canadian dollars or rupees.
Choose APY or interest rate
Pick the rate type the bank quotes and enter it. APY already includes compounding; an interest rate needs the compounding frequency.
Set compounding and term
Choose daily to annually compounding and enter the term in years and months, e.g. 0 years 6 months.
Read the maturity value
See the value at maturity, interest earned, the APY and the equivalent interest rate. Show steps explains every step.
Compare, stress-test and export
Compare a second CD, model an early withdrawal penalty, estimate tax on the interest, and download the growth table as CSV.
What Is a Certificate of Deposit?
A certificate of deposit (CD) is a savings account where you leave a lump sum with a bank or credit union for a fixed term, such as 6 months or 5 years, in exchange for a fixed rate. The Consumer Financial Protection Bureau notes that taking the money out before the term ends usually costs a penalty.
Fixed rate
The rate is locked for the term, so you know the maturity value on day one.
Fixed term
Common terms run from 3 months to 5 years; longer terms often pay more.
Insured
Bank CDs are FDIC-insured and credit union certificates NCUA-insured, within the coverage limits.
Less flexible
Your money is tied up until maturity unless you accept a penalty.
How to Calculate CD Interest
CD interest compounds: each period’s interest is added to the balance and earns interest itself.
CD formula (interest rate)
Future value = P × (1 + R ÷ m)^(m × t)
- P
- initial deposit
- R
- annual interest rate (decimal)
- m
- compounding periods per year
- t
- term in years (months ÷ 12)
Example: $5,000 at 4.25% compounded monthly for 18 months: 5,000 × (1 + 0.0425 ÷ 12)^18 ≈ $5,328.53
With an APY
Future value = P × (1 + APY)^t
Example: $10,000 × 1.05² = $11,025
Interest earned
Interest = Future value − P
Example: $11,025 − $10,000 = $1,025
Step by step
- Convert the rate to a decimal: 4.25% → 0.0425.
- Divide by the compounding periods per year: 0.0425 ÷ 12 ≈ 0.003542 a month.
- Count the periods: 12 × 1.5 years = 18.
- Raise (1 + periodic rate) to that power and multiply by the deposit.
- Subtract the deposit to get the interest: $328.53.
This calculator treats a month as one-twelfth of a 365-day year, so a 7-month term is 7 ÷ 12 of a year. Your bank may count actual days, which can move the result by a few cents.
APY vs Interest Rate
Banks quote two numbers for the same CD. Mixing them up is the most common CD calculation mistake.
Interest rate (nominal)
R
The stated annual rate before compounding. It needs a compounding frequency to tell you what you will earn.
APY (annual percentage yield)
APY = (1 + R ÷ m)^m − 1
What you actually earn in a year once compounding is included. US banks must disclose it under the Truth in Savings rules, which makes it the fairest number for comparing CDs.
The official definition in Regulation DD, Appendix A computes the APY from the interest earned over the term: APY = 100 × [(1 + Interest ÷ Principal)^(365 ÷ days in term) − 1]. An APY must never be treated as a nominal rate and compounded again: 5% APY compounded monthly is not 5.116%; it is already 5%. This calculator converts an APY into the matching rate per period first, so the schedule and the maturity value agree.
How compounding frequency works
$10,000 for one year at a 5% interest rate, compounded at different frequencies:
| Compounding | Value after 1 year | APY | Rate needed for 5% APY |
|---|---|---|---|
| Annually | $10,500.00 | 5.000% | 5.000% |
| Semiannually | $10,506.25 | 5.063% | 4.939% |
| Quarterly | $10,509.45 | 5.095% | 4.909% |
| Monthly | $10,511.62 | 5.116% | 4.889% |
| Daily | $10,512.67 | 5.127% | 4.879% |
More frequent compounding adds a little more, but the gap between monthly and daily is about a dollar a year on $10,000. The rate and the term matter far more than the compounding frequency.
CD Maturity Examples
Illustrative rates, not current offers. Select “Try this example” to load any of them into the calculator.
Emergency fund overflow
1-year CD
$10,000 goes into a 12-month CD at 4.15% APY.
- For exactly one year, interest = deposit × APY:
$10,000 × 0.0415 = $415
$10,415.00 at maturity.
- For exactly one year, interest = deposit × APY:
Long-term savers
5-year CD
A retiree locks $50,000 into a 5-year CD at 4.00% APY.
1.04^5 ≈ 1.216653$50,000 × 1.216653 ≈ $60,832.65
$60,832.65 at maturity: $10,832.65 of interest before tax.
Reading the fine print
Interest rate compounded daily
A 3-year CD quotes a 4.50% interest rate compounded daily on $15,000.
- Rate per day:
0.045 ÷ 365; periods:365 × 3 = 1,095 $15,000 × (1 + 0.045 ÷ 365)^1,095 ≈ $17,167.91
$17,167.91 at maturity — an APY of about 4.60%.
- Rate per day:
UK savers
2-year fixed-rate bond
£20,000 in a 2-year fixed-rate savings bond paying 4.30% AER (the UK name for an annual yield).
- AER works like APY:
£20,000 × 1.043² ≈ £21,756.98
£21,756.98 at maturity: £1,756.98 of interest.
- AER works like APY:
Plans change
Breaking a 2-year CD early
$10,000 in a 2-year CD at 4.50% APY, closed after 8 months. The penalty is 6 months of interest.
- Value after 8 months:
$10,000 × 1.045^(8/12) ≈ $10,297.79 - Penalty:
$10,000 × 4.4098% × 6 ÷ 12 ≈ $220.49
You receive about $10,077.30 instead of $10,920.25 at maturity.
- Value after 8 months:
Taxes
Interest after a 24% tax rate
The $10,000, 2-year CD at 5% APY, with interest taxed at 24% each year.
- Year 1:
$500 × 24% = $120; year 2:$525 × 24% = $126 - After tax:
$1,025 − $246 = $779
About $779 of interest after tax.
- Year 1:
Comparing CD Rates
Use the comparison option to put two CDs side by side. A few rules keep the comparison fair.
- Compare APYs, not interest rates. The APY puts every compounding frequency on the same footing.
- Compare interest per year when the terms differ. On $10,000, a 1-year CD at 4.60% APY earns $460, while a 3-year CD at 4.10% APY earns $1,281.12 in total, about $427 a year. The shorter CD pays more per year, but you would need to reinvest at whatever rate is available in a year’s time.
- Check the penalty and the minimum deposit, not just the rate. A slightly lower rate with a smaller penalty can be the better choice if you might need the money.
- Consider a CD ladder. Splitting money across several terms (for example 1, 2 and 3 years) means part of it matures every year, which balances higher long-term rates against access to cash.
To see how compounding works with regular deposits instead of one lump sum, try the Compound Interest Calculator. If you are saving toward a target date, the Savings Goal Calculator works backwards from the amount you need.
Early Withdrawal Penalties
Taking money out of a CD before it matures usually costs part of the interest — and sometimes some of your deposit.
Penalties are set by each bank and stated in the account agreement, often as a number of days or months of interest. According to the OCC’s HelpWithMyBank, federal law sets a minimum penalty only for withdrawals within the first six days (at least seven days’ simple interest) and sets no maximum.
The calculator models the common form: penalty = deposit × interest rate × months ÷ 12. On $10,000 in a 2-year CD at 4.50% APY (a 4.41% interest rate compounded monthly), a 6-month penalty is about $220.49:
- Closed after 8 months: $297.79 of interest earned, so you keep about $77.30 of it.
- Closed after 2 months: only $73.63 earned, so the penalty takes $146.86 of your original deposit.
Some banks charge on the amount withdrawn rather than the deposit, or use a flat fee. Enter your own bank’s terms to get a closer estimate. In the US, an early withdrawal penalty is generally deductible from income; see IRS Publication 550.
General CD Tax Considerations
CD interest is usually taxable income. The tax option in the calculator applies one flat rate you choose to each year’s interest.
United States
Interest is taxable when it is credited or available. For CDs longer than one year, part of the interest is generally reportable each year even if paid at maturity (IRS Publication 550). Interest in an IRA CD follows the IRA’s rules.
Canada
Interest on compound GICs must be reported for each complete investment year, even before it is paid (CRA line 12100). A TFSA or RRSP changes this.
United Kingdom
The Personal Savings Allowance lets basic-rate taxpayers earn £1,000 of interest tax-free (£500 for higher-rate, £0 for additional-rate). Interest in an ISA is tax-free.
The estimate is deliberately simple: it does not model brackets, allowances, state or provincial tax, or tax-advantaged accounts. Use it to compare after-tax returns, not to prepare a return.
Results are educational projections, not financial or tax advice, and not an offer from any bank. Confirm rates, penalties and tax treatment with your bank and a qualified adviser.
CD Calculator FAQs
How much will a $10,000 CD earn in a year?
Multiply the deposit by the APY: at 4% APY, a 1-year CD earns $10,000 × 0.04 = $400; at 5% APY it earns $500. For other terms, use $10,000 × (1 + APY)^years − $10,000, or enter the numbers in the calculator. Taxes and any early withdrawal penalty reduce what you keep.
Should I enter the APY or the interest rate?
Enter whichever the bank quotes and choose the matching rate type. The APY is usually the headline number and gives the simplest, most comparable answer. If you only know the interest rate, select Interest rate and the compounding frequency; the calculator then shows the APY it produces.
Is CD interest compounded daily or monthly?
It depends on the bank: daily and monthly compounding are common, and some CDs compound quarterly or pay simple interest. If you know the APY, the compounding frequency does not change what you earn over a full year, because the APY already includes it.
Are CDs safe?
CDs at FDIC-insured banks (or NCUA-insured credit unions) are covered up to $250,000 per depositor, per insured institution, for each account ownership category. See the FDIC’s deposit insurance guide. Your rate is fixed for the term, but inflation can still reduce what the money buys.
What happens when a CD matures?
Banks usually give a short grace period, often a week or so, to withdraw the money or move it. If you do nothing, many CDs renew automatically for the same term at the bank’s current rate, which may be lower. Check the maturity instructions in your account agreement.
Can I lose money in a CD?
Not on an insured CD held to maturity. You can end up with less than you deposited if you withdraw early and the penalty is larger than the interest earned so far, which the early withdrawal scenario in the calculator shows. Brokered CDs sold before maturity can also lose value if rates have risen.
Is a CD the same as a GIC or a fixed deposit?
They work the same way: a fixed sum, a fixed rate and a fixed term. In Canada the product is called a GIC (guaranteed investment certificate); in the UK, a fixed-rate savings bond; in Pakistan and India, a fixed or term deposit. The maths in this calculator applies to all of them. Rules on insurance, penalties and tax differ by country.
Does the calculator show current CD rates?
No. It doesn’t fetch or display any bank’s rates. Enter the APY or rate from an offer you are considering. The rates in the examples on this page are illustrations only.