CD Calculator

A certificate of deposit (CD) locks in your money for a fixed term at a guaranteed interest rate. This calculator shows exactly how much your CD will be worth at maturity.

• Initial Deposit: the amount you deposit when you open the CD. Most banks require a minimum of $500 to $1,000.
• Annual Interest Rate: the stated rate on the CD, not the APY. Banks must disclose both. As of 2024, top CD rates are in the 5.0-5.5% range for 1-year terms.
• Term: how long you agree to leave the money. Common terms are 3, 6, 12, 18, and 24 months. Early withdrawal typically triggers a penalty of 60-150 days of interest.
• Compounding: how often interest is credited to your account. Daily compounding produces slightly more than monthly or annual compounding at the same stated rate.

The APY (Annual Percentage Yield) accounts for compounding and lets you compare CDs with different compounding frequencies on equal footing.

CDs use compound interest. The formula for the ending balance is:

A = P × (1 + r/n)^(n × t)

• A = ending balance
• P = initial deposit (principal)
• r = annual interest rate (as a decimal)
• n = number of compounding periods per year (daily = 365)
• t = time in years

The APY formula converts the stated rate to an effective annual rate that accounts for compounding:

APY = (1 + r/n)^n - 1

Example: $10,000 at 5.0% compounded daily for 12 months. A = $10,000 × (1 + 0.05/365)^365 = $10,512.67. APY = (1 + 0.05/365)^365 - 1 = 5.127%.