CD Calculator
Calculate Certificate of Deposit (CD) interest growth and APY yield returns at maturity.
Maturity Balance
Locking a rate, and what it costs to change your mind
A certificate of deposit trades access for certainty. You commit funds for a fixed term and the bank fixes the rate, so the return is known at the outset and not affected by rate moves afterwards. Within deposit-insurance limits the principal carries effectively no credit risk, which makes CDs one of the few genuinely predictable places to hold money.
Compare on APY rather than the headline rate. APY already folds in the compounding frequency, so it is the only figure that compares two products honestly — a 5.00% rate compounded daily and one compounded annually are not the same offer. Watch the maturity behaviour too: many CDs roll over automatically into a new term at whatever the prevailing rate is, which can silently move you from a good rate to a poor one if the notice window passes unnoticed.
Early withdrawal is where the cost sits. Breaking a CD typically forfeits several months of interest, and on a long term it can eat into principal. Two structures reduce the sting: aladder splits money across staggered maturities so something matures regularly, and a no-penalty CD allows early access at a lower rate. Against inflation, a CD paying 4.5% while prices rise 3% is really growing at about 1.5%, and interest is usually taxable.
Frequently asked questions
What is a Certificate of Deposit (CD)?
A CD is a fixed-term savings product offered by banks with guaranteed interest rates.
How does a certificate of deposit work?
You commit a lump sum for a fixed term in exchange for a fixed rate, typically higher than a savings account because the bank can rely on the deposit. Withdraw early and you pay a penalty, usually several months of interest. In the US, CDs are FDIC-insured up to $250,000 per depositor per institution.
What is a CD ladder?
Splitting your money across CDs maturing at staggered intervals - say, one each year for five years - so that a portion matures annually and can be spent or reinvested. It gives you much of the yield of long-dated CDs while keeping regular access, which hedges against both rate moves and liquidity needs.
What is the difference between APY and interest rate?
APY includes the effect of compounding, so it is always at or above the nominal rate. A 5% rate compounded monthly gives an APY of about 5.12%. Because banks must quote APY for deposits in the US, comparing APY to APY is the like-for-like comparison.