CD Calculator

A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period — the term — at a fixed interest rate. In exchange for leaving your money untouched, the bank pays a higher rate than a regular savings account. At the end of the term (maturity), you receive your original deposit plus all accrued interest.

At 4.50% APY, a $10,000 CD earns about $450 after 1 year, $920 after 2 years, and roughly $2,462 after 5 years. At 5.00% APY, the same $10,000 earns $500 after 1 year and about $2,763 after 5 years. Returns scale linearly — a $25,000 CD earns 2.5× the interest of a $10,000 CD at the same APY and term. See the CD interest examples above for exact numbers across $10K, $25K, $50K, and $100K deposits.

CD interest is calculated from the bank's APY, which already accounts for how often the bank compounds. The formula is:

Maturity value = Deposit × (1 + APY)^(months / 12)

For a $10,000 CD at 4.50% APY for 18 months: $10,000 × 1.045^(1.5) ≈ $10,682.54, meaning $682.54 in interest. Total interest earned is simply maturity value minus the original deposit. Because APY is standardized by the Truth in Savings Act, you don't need to know whether the bank compounds daily, monthly, or quarterly — using APY directly gives the correct answer either way. To model a balance that also receives ongoing contributions (rather than a fixed lump-sum CD deposit), use the compound interest calculator.

APY (Annual Percentage Yield) is the effective annual rate of return after accounting for compounding. Banks are required by law (the Truth in Savings Act) to advertise CDs using APY, which makes it easy to compare rates across banks regardless of how often each one compounds interest. Always compare CDs by APY, not the stated interest rate. To convert between APY and a nominal rate for any compounding frequency, use the APY calculator.

Yes — CD interest is taxed as ordinary income in the year it is credited to your account, even if it isn't paid out (for multi-year CDs). Banks send a Form 1099-INT for any year you earn $10 or more in interest, which you report on your federal return. A 5-year CD does not let you defer the tax to year 5 — each year's accrued interest is taxable that year. Holding a CD inside a traditional or Roth IRA defers (or in the Roth case, eliminates) the tax until withdrawal.

Most CDs charge an early withdrawal penalty equal to a fixed number of months of interest. Typical penalties: 1–3 months of interest for CDs under 1 year, 6 months for 1–2 year CDs, and 6–12 months for longer terms. The penalty is calculated against the deposit, so if you withdraw very early — before enough interest has accrued — the penalty can dip into your principal, leaving you with less than you deposited. Some no-penalty CDs exist but usually offer lower APYs.

Yes. CDs at FDIC-member banks are insured up to $250,000 per depositor, per insured bank, per ownership category. Joint accounts get $250,000 per co-owner — meaning a couple can cover up to $500,000 jointly at one bank. To insure more than $250,000 individually, you can split funds across multiple FDIC-insured banks or use different ownership categories (individual, joint, retirement, revocable trust). Brokered CDs purchased through a brokerage are also FDIC-insured if the underlying bank is — the brokerage just acts as a middleman.

A CD ladder is a strategy where you split your savings across CDs with different maturity dates — for example, 1-year, 2-year, 3-year, 4-year, and 5-year CDs. As each CD matures, you reinvest at the current rate. This gives you access to funds on a rolling basis while still earning higher rates than a regular savings account, and reduces the risk of being locked into a low rate. Build and compare ladders with the CD ladder calculator.

CDs typically offer higher rates than HYSAs but require locking up your money for a fixed term. HYSAs are fully liquid — you can withdraw anytime without penalty. If you have money you won't need for a known period (6 months, 1 year, etc.), a CD usually wins on rate. If you might need the funds, a HYSA is more practical. Many savers use both: a HYSA for their emergency fund and CDs for money earmarked for a specific goal.