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CD Calculator
About the CD Calculator
Estimate how much a certificate of deposit (CD) will earn over its term, with different compounding options.
How to use the CD Calculator
- Enter the Deposit Amount, the APY Rate and the Term (Months).
- Choose the Compounding frequency.
- Press Calculate CD Earnings.
Formula and method
Balance = P × (1 + APY)^(months ÷ 12). With a nominal rate, use P × (1 + r ÷ n)^(n × t).
Worked example
$10,000 at 4.5% APY for 12 months earns about $450.
When to use the CD Calculator
- Working out how much a certificate of deposit will pay at maturity.
- Comparing CD terms such as 6 months, 1 year and 5 years.
- Comparing a CD with a regular savings account.
Common mistakes to avoid
- Forgetting the early-withdrawal penalty if you might need the money.
- Locking in a long term just before rates rise.
Tips
- Withdrawing early usually costs a penalty, often several months of interest.
- Compare CDs by APY, and check that the bank is insured (FDIC or equivalent).
Frequently Asked Questions
CDs at insured banks are protected up to the deposit insurance limit, which makes them a low-risk choice.
A certificate of deposit is a savings product with a fixed term and a fixed rate. You agree to leave the money untouched until it matures.
Splitting your money into CDs with different maturity dates, so that part of it becomes available regularly.