CD Calculator
Calculate CD interest earned, final balance, and Annual Percentage Yield (APY). Compare CD rates across terms and compounding frequencies to maximize savings.
Final CD Balance
$10,485.48
APY: 4.855% · Term: 12 months
Interest Earned
$485.48
Effective Yield
4.855%
About the CD Calculator
A CD calculator computes the final balance, total interest earned, and Annual Percentage Yield (APY) for a Certificate of Deposit — one of the safest, most predictable savings instruments available. CDs are FDIC-insured (up to $250,000 per depositor per bank), pay a fixed interest rate for a fixed term, and require no investment expertise or market monitoring. In a high-interest-rate environment, CDs can be one of the most attractive short-term savings vehicles available, offering returns competitive with bonds but with guaranteed principal protection. Our free CD calculator works for any deposit amount, interest rate, term, and compounding frequency. Enter your deposit, the advertised annual rate, the term in months, and how often the bank compounds interest (daily, monthly, quarterly, or annually) to see your exact final balance and true APY. The calculator also shows the difference between APR (the stated rate) and APY (the actual effective annual yield after compounding), which is the number that matters for comparing competing CD offers. CDs are relevant for savers in the USA, UK (fixed-rate bonds), Canada (GICs), and Australia (term deposits).
Formula
FV = P x (1 + r/n)^(n x t) | APY = (1 + r/n)^n - 1 | Interest = FV - P
How It Works
CD future value formula: FV = P x (1 + r/n)^(n x t), where P is principal, r is the annual interest rate, n is the number of compounding periods per year, and t is the term in years. APY = (1 + r/n)^n - 1, which converts the nominal rate to the actual annual yield accounting for compounding. Example: $15,000 deposited in a 12-month CD at 4.75% APR, compounding monthly. t = 1 year, n = 12, r = 0.0475. FV = $15,000 x (1 + 0.0475/12)^12 = $15,000 x (1.003958)^12 = $15,000 x 1.04853 = $15,728. Interest earned = $728. APY = (1.003958)^12 - 1 = 4.853%. The difference between APR (4.75%) and APY (4.853%) is small for short terms but becomes meaningful when comparing CDs of different compounding frequencies. A 5% APR with daily compounding has an APY of 5.127%, versus 5.094% with monthly compounding — a meaningful difference on large deposits or long terms.
Tips & Best Practices
- ✓CD laddering — splitting deposits across multiple terms (3-month, 6-month, 1-year, 2-year, 5-year) — provides access to liquidity as shorter CDs mature while still earning higher rates on longer-term portions. As each rung matures, reinvest at the longest term.
- ✓Early withdrawal penalties can erase interest earnings: a 6-month interest penalty on a 1-year CD at 5% means you need to hold the CD for at least 6 months before early withdrawal breaks even versus a savings account. Always check the penalty before purchasing.
- ✓No-penalty CDs exist but typically pay 0.5-1% less than comparable standard CDs. The liquidity is worth paying for if you are uncertain about your timeline; otherwise, standard CDs with the full yield are better for money you genuinely do not need for the term.
- ✓Compare CD APY to high-yield savings accounts (HYSA): HYSAs have variable rates that can change daily, while CDs lock in the rate. In a falling rate environment, locking a high CD rate now protects your yield. In a rising rate environment, shorter terms and laddering let you capture improving rates.
- ✓Jumbo CDs (typically $100,000+ deposits) sometimes offer slightly higher rates. However, the FDIC insurance limit is $250,000 per depositor per bank — spreading large deposits across multiple institutions preserves full coverage.
- ✓UK fixed-rate bonds and Australian term deposits operate identically to US CDs: principal protection, fixed term, fixed rate. UK fixed-rate bonds typically quote AER (equivalent to APY); Australian term deposits quote per annum rates compounded annually.
- ✓Bump-up CDs: if rates rise during your CD term, a bump-up CD lets you request one rate increase to the current rate. These pay slightly less initially but provide protection against rising rates for longer-term deposits.
Who Uses This Calculator
Savers comparing CD rates across banks for a fixed-term deposit. People with emergency fund overages looking for safe, higher-yield short-term investments. Retirees building a CD ladder for predictable income without equity market exposure. Anyone comparing CDs to high-yield savings accounts, Treasuries, or money market funds. Investors parking proceeds from asset sales for a defined period pending redeployment.
Optimised for: USA · Canada · UK · Australia · Calculations run in your browser · No data stored
Frequently Asked Questions
What is the difference between APR and APY on a CD?
APR is the stated annual interest rate. APY (Annual Percentage Yield) accounts for compounding and represents the actual annual return. For monthly compounding at 5% APR: APY = (1 + 0.05/12)^12 - 1 = 5.116%.
Are CD rates fixed or variable?
Most CDs have fixed rates locked for the entire term. Variable-rate CDs exist but are rare. Bump-up CDs allow a one-time rate increase. Step-up CDs have predetermined scheduled increases.
What is the CD early withdrawal penalty?
Typically 60-150 days of interest for short-term CDs, 180 days for 1-year CDs, and 12 months for 5-year CDs. Some no-penalty CDs exist but pay lower rates. Always check terms before locking funds.
Are CDs FDIC insured?
Yes — FDIC insures up to $250,000 per depositor, per bank, per ownership category. Credit union CDs are insured by NCUA up to the same limits. Staying within insured limits is risk-free.
Should I ladder CDs?
CD laddering — splitting funds across multiple terms (3-month, 6-month, 1-year, 2-year, 5-year) — provides both liquidity and access to better rates. As each CD matures, reinvest at the longest term.