CD Calculator
Estimate your Certificate of Deposit earnings. Compare up to 4 scenarios side-by-side to find the best CD for your savings goals.
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Frequently Asked Questions
How is CD interest calculated?
CD interest is typically calculated using compound interest: A = P × (1 + r/n)^(n×t), where P is your principal, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years. More frequent compounding (e.g., daily vs. annually) results in slightly higher returns.
What is APY and how does it differ from APR?
APY (Annual Percentage Yield) includes the effect of compounding interest, while APR (Annual Percentage Rate) does not. A CD with a 4.5% APR compounded monthly has an APY of about 4.594%. APY gives you the true picture of what you'll earn in a year.
What happens if I withdraw from a CD before maturity?
Withdrawing early typically incurs a penalty, usually measured in months of interest (e.g., 3, 6, or 12 months). In some cases with short terms and high penalties, you could lose part of your principal. Always check your bank's early withdrawal terms before investing.
Is CD interest taxable?
Yes, CD interest is considered taxable income by the IRS. You'll receive a 1099-INT form from your bank. The interest is taxed at your ordinary income tax rate, not the lower capital gains rate. State taxes may also apply depending on where you live.
How does a CD ladder work?
A CD ladder splits your investment across multiple CDs with staggered maturity dates (e.g., 1, 2, 3, 4, and 5 years). As each CD matures, you reinvest at the longest term. This gives you regular access to funds while capturing higher long-term rates. Use our CD Ladder Calculator to build your own.
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