CD Calculator
Enter a deposit, the rate the bank quotes and the term to see exactly what your certificate of deposit is worth at maturity and how much interest it earns.
- Free
- No sign-up
- Private
Common terms: 3, 6, 12, 18, 24, 36 and 60 months.
Banks advertise APY. Pick “Interest rate” only if you have the nominal rate.
APY already includes compounding, so this only affects the APR shown.
- Interest earned
- $425.00
- APY
- 4.25%
- Equivalent rate (APR, daily)
- 4.162%
- Interest per month (average)
- $35.42
- Total return
- 4.25%
- Term in years
- 1
| Period | Interest | Balance |
|---|---|---|
| Month 1 | $34.74 | $10,034.74 |
| Month 2 | $34.87 | $10,069.61 |
| Month 3 | $34.99 | $10,104.60 |
| Month 4 | $35.11 | $10,139.71 |
| Month 5 | $35.23 | $10,174.94 |
| Month 6 | $35.35 | $10,210.29 |
| Month 7 | $35.48 | $10,245.76 |
| Month 8 | $35.60 | $10,281.36 |
| Month 9 | $35.72 | $10,317.09 |
| Month 10 | $35.85 | $10,352.93 |
| Month 11 | $35.97 | $10,388.90 |
| Month 12 | $36.10 | $10,425.00 |
How this was calculated
- Term in years: 12 months ÷ 12 = 1 years.
- Balance = deposit × (1 + APY)^years = $10,000.00 × (1 + 0.0425)^1 = $10,425.00.
- Interest earned = $10,425.00 − $10,000.00 = $425.00.
Assumes the CD is held to maturity with interest left in the account, before taxes and early-withdrawal penalties. Not financial advice.
How this CD calculator works
A certificate of deposit pays a fixed rate for a fixed term, and banks are required by the Truth in Savings Act to quote that rate as an APY (annual percentage yield). APY already includes the effect of compounding, so the ending balance of a CD is simply deposit × (1 + APY)years, where years is the term in months divided by 12. This CD calculator uses exactly that, which is why changing the compounding frequency does nothing while you are in APY mode.
If all you have is the nominal interest rate, switch the rate type to "Interest rate (APR)" and pick how often the bank compounds. The calculator first converts it to APY with (1 + r/n)n − 1, then applies the same formula. Open "How this was calculated" under the result to see each step with your numbers.
Worked example
You put $10,000 in a 12-month CD at 5.00% APY. One year of growth is $10,000 × 1.05 = $10,500, so you earn $500. If the bank instead advertised a 5.00% rate compounded monthly, the APY would be (1 + 0.05/12)12 − 1 = 5.116%, and you would end with $10,511.62. For a term that is not a whole number of years the exponent is fractional: $25,000 in an 18-month CD at 4.5% APY grows to $25,000 × 1.0451.5 = $26,706.34.
APY vs. interest rate on a CD
The interest rate is what the bank applies each compounding period; APY is what you actually earn in a year after compounding. They are equal only with annual compounding. With daily compounding a 4.89% rate gives a 5.01% APY. Always compare CDs on APY, since that is the number that already accounts for compounding. The calculator shows both so you can check a bank's disclosure.
Common mistakes
- Multiplying the APY by the term. A 6-month CD at 5% APY does not pay 5%; it pays about 2.47% for those six months (1.050.5 − 1).
- Applying compounding twice. Entering an APY and then compounding it again monthly overstates the interest. That is why APY mode ignores the frequency.
- Forgetting taxes. CD interest is ordinary income in the year it is credited, unless the CD sits inside an IRA.
When the result is misleading
The calculator assumes interest stays in the CD until maturity. Some CDs pay interest out monthly instead, which means slightly less growth unless you reinvest it. Withdrawing early usually costs several months of interest, and a CD that auto-renews will roll into whatever rate the bank offers then, not the rate you started with. For a savings plan with regular deposits, use the compound interest calculator instead.
Frequently asked questions
How is CD interest calculated?
Balance = deposit × (1 + APY)^years. $10,000 in a 12-month CD at 5% APY ends at exactly $10,500. An 18-month CD at 4.5% APY on $25,000 ends at $25,000 × 1.045^1.5 = $26,706.34.
What is the difference between APY and the interest rate on a CD?
The interest rate (APR) is the nominal rate before compounding; APY includes compounding. 5% compounded monthly is an APY of 5.116%. Banks must disclose APY, so use the APY setting unless you only have the rate.
Does compounding frequency matter for a CD?
Only if you are entering the interest rate. If you enter the APY, compounding is already built in and the frequency does not change the result.
Is CD interest taxable?
Yes. CD interest is taxed as ordinary income in the year it is credited, even if you do not withdraw it, unless the CD is held in an IRA. The bank reports it on Form 1099-INT.
What happens if I withdraw from a CD early?
Most banks charge an early withdrawal penalty, commonly 3 to 12 months of interest depending on the term. This calculator assumes you hold the CD to maturity.
Learn more
Key terms
Glossary →- Annual Percentage Yield (APY)
- Annual percentage yield (APY) is the total interest a deposit account pays over a 365-day period, expressed as a percentage that includes the effect of compounding.
- Compound Interest
- Compound interest is interest calculated on both the original principal and the interest already added to it, so the balance grows faster than it would with simple interest.