CDs pay a fixed rate for a fixed term – from a few months to five years or more. Banks usually compound daily or monthly. Withdrawing early normally costs a penalty of several months’ interest. CDs at FDIC-insured banks are protected up to $250,000 per depositor, per bank.
How to use the CD Calculator – Certificate of Deposit
- Initial deposit
- Interest rate (APR)
- Term
- Compounding frequency
- Tax rate on interest
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the deposit, the interest rate (not the APY), the term and the compounding frequency, and optionally your tax rate.
Tips
- Use the nominal annual rate and pick the compounding frequency your bank or broker states.
- Small differences in return or fees compound into large differences over decades.
- Run the calculation with a cautious, a central and an optimistic return to see the range of outcomes.
- Past returns do not guarantee future returns – nothing here is investment advice.
Common mistakes to avoid
- Comparing an APR with an APY or effective rate.
- Ignoring inflation, taxes and fees when judging a real return.
- Entering a percentage as a decimal (5 instead of 0.05 is correct here).
Inputs explained
| Field | What to enter |
|---|---|
| Initial deposit | Amount in your currency |
| Interest rate (APR) | In % |
| Term | Units: years, months |
| Compounding frequency | Choose one: Yearly, Semi-annually, Quarterly, Monthly … |
| Tax rate on interest | In % |
What each result means
- Final balance = [Initial deposit]×(1 + effr([Interest rate (APR)]÷100, [Compounding frequency]))^([Term]÷12)
- Interest earned = [Final balance] – [Initial deposit]
- APY = effr([Interest rate (APR)]÷100, [Compounding frequency])×100
- Interest after tax = [Interest earned]×(1 – [Tax rate on interest]÷100)
Example values
How the main result changes when Initial deposit changes and everything else stays at the example values above:
| Initial deposit | Final balance |
|---|---|
| 5,000 | 5,442.77 |
| 7,500 | 8,164.15 |
| 10,000 | 10,885.54 |
| 12,500 | 13,606.92 |
| 15,000 | 16,328.3 |
| 20,000 | 21,771.07 |
Formula
Final balance = deposit × (1 + r ÷ n)^(n × years)APY = (1 + r ÷ n)^n − 1After-tax interest = interest × (1 − tax rate)Worked example
Inputs — Initial deposit: $10,000; Interest rate (APR): 4.25 %; Term: 2 years; Compounding frequency: Monthly; Tax rate on interest: 0 %.
Results — Final balance = $10,885.54; Interest earned = $885.54; APY = 4.334 %; Interest after tax = $885.54.
Frequently asked questions
How is CD interest calculated?
With compound interest: deposit × (1 + rate ÷ n)^(n × years).
Are CDs insured?
Yes, at FDIC (banks) or NCUA (credit unions) institutions up to $250,000 per depositor per institution.
What happens if I withdraw early?
You usually pay a penalty, often 3–12 months of interest.
What formula does the CD Calculator – Certificate of Deposit use?
Final balance = deposit × (1 + r ÷ n)^(n × years).