CD calculator
Use the CD calculator to see what a certificate of deposit will be worth at maturity. The CD calculator shows the effective APY next to the rate your bank quoted, so you can compare CDs that compound at different frequencies without converting anything by hand.
12 or more rolls into a full year above
Enter 0 if this CD is held in a traditional or Roth IRA
Maturity value
$10,831.43
| Interest earned | $831.43 |
| Effective APY | 4.07% |
| Federal tax at 0.00% | $0.00 |
| Balance after tax | $10,831.43 |
Insured by the FDIC up to $250,000 per depositor, per bank, per ownership category.
| Year | Balance |
|---|---|
| 1 | $10,407.42 |
| 2 | $10,831.43 |
Your numbers never leave your browser.
Figures from Regulation DD (12 CFR Part 1030) and FDIC guidance.
How this is calculated
This calculator follows Regulation DD's APY formula exactly: APY = (1 + r/n)n − 1, where r is the nominal annual rate and n is the number of compounding periods per year.1 It does not model early-withdrawal penalties, promotional or step-up rates that change during the term, or state taxes on the interest.
In this article
- How to use the CD calculator
- What your CD calculator results mean
- How is CD interest calculated?
- CD APY by compounding frequency
- Why APY matters more than the interest rate
- CD calculation example: $10,000 at 4.00% for two years
- What happens if you withdraw from a CD early?
- Related calculators
- Frequently asked questions about CD calculators
How to use the CD calculator
Everything you need is in the account disclosure, and the inputs come in three steps.
1. Enter your deposit and the rate
The deposit is what goes in. Check whether your bank quotes APR or APY, since they're not the same number. If it already says APY, compounding is baked in.
2. Set the term and compounding frequency
Enter the term in years and months, and the compounding frequency stated in the disclosure. Daily and monthly are the two most common.
3. Add your tax rate to see what you keep
Use the top marginal rate your income reaches, not an average. CD interest stacks on top of everything else you earn. Set it to zero for a CD held inside an IRA.
What your CD calculator results mean
- Maturity value, the large figure
- What the CD is worth at the end of the term. It is your deposit plus interest, compounded at the frequency you chose.
- Interest earned
- The maturity value minus your deposit.
- Effective APY
- The yearly yield once compounding is counted. Use it to compare CDs that compound on different schedules.
- Federal tax at your rate
- The interest earned times the tax rate you entered. Only the interest is taxed, never the deposit.
- Balance after tax
- The maturity value minus that federal tax. This is what you keep.
- The FDIC line under the result
- The FDIC insurance limit for one depositor at one bank in one ownership category. If your deposit is bigger, it shows how much sits above the limit.
- Balance by year
- The balance at the end of each year of the term. If the term ends partway through a year, the last row covers only those months.
How is CD interest calculated?
CD interest is calculated by compounding your deposit at a per-period rate for every period in the term.
- Start with your deposit, the principal P.
- Divide the annual rate by the number of compounding periods per year to get the per-period rate.
- Grow the balance by that per-period rate for every period across the term: A = P × (1 + r/n)^(n×t).
- Interest earned is the maturity value minus your deposit, A − P.
- The effective annual yield, APY = (1 + r/n)^n − 1, is the federally defined way to compare CDs that compound at different frequencies.1
CD APY by compounding frequency
The table holds a $10,000 deposit, a 4.00% nominal rate and a two-year term constant, so only the compounding schedule changes the APY.
| Compounding | Periods per year | Effective APY | $10,000 after 2 years |
|---|---|---|---|
| Daily | 365 | 4.08% | $10,832.82 |
| Monthly | 12 | 4.07% | $10,831.43 |
| Quarterly | 4 | 4.06% | $10,828.57 |
| Semi-annual | 2 | 4.04% | $10,824.32 |
| Annual | 1 | 4.00% | $10,816.00 |
Tweed calculations from the stated inputs. These are not quoted market rates.
Why APY matters more than the interest rate
Two CDs can quote the identical nominal rate and pay different amounts, because APY folds compounding in and the quoted rate does not.
Comparing APYs is the apples-to-apples comparison, and it is the number Regulation DD requires banks to disclose.1
A bank advertising a slightly lower rate with daily compounding can out-earn a competitor's higher rate compounded annually. The rate alone can't tell you that. The APY always can.
Run your own numbers
See your maturity value and APY in seconds
CD calculation example: $10,000 at 4.00% for two years
Start with a $10,000 deposit at a 4.00% nominal annual rate, compounding monthly, over a two-year term.
The periodic rate is 4.00% divided by 12, or 0.00333. Compounding across 24 monthly periods gives a maturity value of $10,831.43.
Subtract the deposit and the interest earned is $831.43. Converting the periodic rate to an annual yield gives an effective APY of 4.07%, higher than the 4.00% nominal rate because compounding is doing real work over two years.
Run your own deposit, rate, and term through the calculator above.
What happens if you withdraw from a CD early?
Early-withdrawal penalties are set by the bank, not by federal rule, and are commonly quoted as a number of months of interest.
A penalty can exceed the interest earned on a short-held CD, which means you can get back less than you deposited.
The maturity figure above assumes you hold the CD to term. This calculator does not model early-withdrawal penalties, since they vary by institution and aren't centrally published. Check your own account disclosure for the specific terms.
Frequently asked questions about CD calculators
How much does a $10,000 CD earn in interest?
A $10,000 CD earns different amounts depending on the rate, term, and compounding frequency your bank offers. At a 4.00% nominal rate compounding monthly over two years, for example, it earns $831.43 in interest, ending at $10,831.43. Run your own numbers in the calculator above.
How is CD interest calculated?
CD interest is calculated by compounding your deposit at a per-period rate for every period in the term: divide the annual rate by the compounding frequency, then grow the balance by that rate each period. The maturity value minus your original deposit is the interest earned.
What is APY on a CD, and how is it different from the interest rate?
APY on a CD is the effective annual yield once compounding is factored in, while the interest rate is the raw nominal rate before compounding. APY is always equal to or higher than the stated rate, and it's the only number that lets you compare CDs with different compounding schedules.
Do CDs compound daily or monthly?
CD compounding frequency varies by bank and by product, with daily and monthly the two most common schedules. Check the account disclosure for the exact frequency, since a bank rarely states it prominently. If you can't find it, assuming monthly is the safer estimate, since it slightly understates rather than overstates.
Is CD interest taxed?
CD interest is taxed as ordinary income in the year it's credited to your account, even on a CD you can't touch without a penalty. Banks report interest over $10 to the IRS on Form 1099-INT, but smaller amounts are still taxable even without a form.
Is money in a CD FDIC insured?
Money in a CD is FDIC insured up to $250,000 per depositor, per bank, per ownership category, the same standard limit that covers savings and checking accounts. Credit union CDs carry equivalent NCUA coverage instead. Spreading larger balances across ownership categories or institutions extends the protection further.
Personal finance writer, former Forbes contributor and This Week in Fintech writer. He isn't a financial advisor or a CPA.
Sources
- https://www.consumerfinance.gov/rules-policy/regulations/1030/
- https://www.fdic.gov/resources/deposit-insurance/brochures/insured-deposits
- https://www.irs.gov/taxtopics/tc403