CD Calculator

How This Calculator Works

This CD calculator estimates the maturity value of your Certificate of Deposit by applying compound interest over your selected term. Enter your initial deposit, the APY (Annual Percentage Yield) offered by your bank, and the CD term to see how much your money will grow.

The calculator assumes monthly compounding, which is the most common method used by banks. Your actual results may vary slightly based on your bank's specific compounding frequency.

What Is a Certificate of Deposit (CD)?

A CD is a type of savings account that holds a fixed amount of money for a fixed period of time—ranging from a few months to several years—and in exchange, the bank pays you interest. CDs typically offer higher interest rates than regular savings accounts because you agree to leave your money untouched until maturity.

Understanding APY

APY (Annual Percentage Yield) represents the total amount of interest you'll earn in one year, including the effect of compound interest. When comparing CDs, always compare APY rather than the basic interest rate to get an accurate picture of your potential earnings.

Key Factors to Consider

• Term Length:Longer terms typically offer higher APYs, but your money is locked up for a longer period. Consider your liquidity needs before committing to a long-term CD.
• Early Withdrawal Penalties:If you withdraw funds before the CD matures, you'll usually pay a penalty, often equal to several months of interest. Make sure you won't need the money before maturity.
• FDIC Insurance:CDs at FDIC-insured banks are protected up to $250,000 per depositor, per institution. This makes them one of the safest investments available.
• Interest Rate Environment:In a rising rate environment, shorter-term CDs give you flexibility to reinvest at higher rates. In a falling rate environment, locking in a longer-term CD secures today's higher rates.

Tips for Maximizing CD Returns

• • Shop around—online banks often offer higher rates than traditional banks
• • Consider a CD ladder to balance liquidity with higher yields
• • Check for promotional rates, especially at credit unions
• • Set a calendar reminder before your CD matures to avoid automatic rollover at lower rates
• • Compare penalty-free CDs if you need flexibility