CD Early Withdrawal Penalty Calculator
Find out exactly what it costs to break your CD before maturity. See whether your penalty eats into your principal and compare the opportunity cost of staying vs. withdrawing.
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Typical Penalties by CD Term
Common penalty ranges at major U.S. banks. Always verify with your specific institution.
| CD Term | Typical Penalty |
|---|---|
| 3-month CD | 1–3 months interest |
| 6-month CD | 3–6 months interest |
| 1-year CD | 3–6 months interest |
| 2-year CD | 6–12 months interest |
| 5-year CD | 6–12 months interest |
Enter your CD details to calculate the early withdrawal penalty.
Frequently Asked Questions
What is a CD early withdrawal penalty?
An early withdrawal penalty is a fee your bank charges when you take money out of a Certificate of Deposit before its maturity date. It's typically expressed as several months' worth of interest (e.g., 3, 6, or 12 months). The penalty is deducted from your accrued interest first; if the penalty exceeds your interest, it can eat into your principal.
Can I lose my principal if I withdraw early?
Yes. If you withdraw very early (e.g., within the first month) and the penalty is steep (e.g., 12 months of interest), the penalty can exceed the interest you've earned. In that case, the bank deducts the remainder from your original deposit. This is why it's important to understand the penalty terms before opening a CD.
How do banks calculate the early withdrawal penalty?
Most banks calculate the penalty as a simple interest formula: Penalty = Principal × (Annual Rate / 12) × Number of Penalty Months. For example, on a $10,000 CD at 5% with a 6-month penalty: $10,000 × (0.05/12) × 6 = $250. Some banks may use different methods, so always check your deposit agreement.
Is it ever worth breaking a CD early?
Sometimes, yes. If current CD rates are significantly higher than your locked-in rate, the opportunity cost of staying may exceed the penalty. For example, if you're earning 2% on a 5-year CD but new CDs pay 5%, breaking early and reinvesting at 5% could net you more money even after paying the penalty.
Are there CDs with no early withdrawal penalty?
Some banks offer 'no-penalty CDs' that allow you to withdraw without a fee, usually after an initial lock-in period (often 6–7 days). However, these typically offer lower interest rates than standard CDs. They can be a good option if you want flexibility without sacrificing too much yield.