CD Calculator

Our Certificate of Deposit calculator, or CD calculator, will help you understand how much interest you can earn based on your deposit amount, annual percentage yield (APY) and CD term.

Compare the Best CDs

How to Use This CD Calculator

This CD calculator was designed to calculate CD interest with just a few numbers. You’ll need to input the amount you plan to deposit in a CD, the annual percentage yield and the CD term.

Here are the steps you’ll want to take to use this CD interest calculator.

1. Add Your Initial Deposit: This is the amount you plan to deposit into your CD. Make sure it can be left untouched until the CD matures so you can avoid any unnecessary early withdrawal penalties.
2. Add The Interest Rate: This is where you’ll enter the annual percentage yield (APY). Compare different CD rates to see how interest can change based on the CDs available.
3. Choose The Term Length: This is the amount of time until the CDs maturity date.
4. Compounding Frequencies: The last thing you’ll need to enter is how often the bank compounds interest. It can either be daily or monthly. If you’re unsure, select daily because this is how most banks calculate the interest earned.

Our CD rate calculator lists the term length in months. However, some banks list longer term CDs in years. Here’s a guide to help you convert years into months.

• 1 year CD = 12 month CD
• 2 year CD = 24 month CD
• 3 year CD = 36 month CD
• 4 year CD = 48 month CD
• 5 year CD = 60 month CD
• 6 year CD = 72 month CD
• 7 year CD = 84 month CD

How To Read Your CD Interest Calculator Results

Once you’ve entered to required information into the certificate of deposit calculator, you will be given a couple of numbers – total balance and total interest earned.

The total balance is how much you’ll have once your CD matures, including the initial deposit and actual interest earned. The total interest earned is how much interest you would earn during the term period.

CD Terms to Know

As you start to compare CDs, you’re going to come across a lot of different CD terminology you’ll want to know.

• Annual Percentage Yield (APY): This is how much interest a bank account earns during a 12 month period. It will be expressed as a percentage.
• Compound Interest: Each time a CD compounds interest (daily or monthly), the interest earned is added to the balance. This amount would then begin earning interest itself. Compounding means your interest will earn interest allowing your CD balance to grow faster.
• Early Withdrawal Penalty: If you withdraw money from a CD before it matures, you will be charged an early withdrawal penalty. Each bank will set their own penalties, but they can be significant.
• Grace Period: A short period after the CD matures that you can either withdraw your money or reinvest it into another CD.
• Initial Deposit: How much money you decide to deposit into your CD.
• Interest Earned: This is the actual interest earned over the term of the CD.
• Maturity Date: The date when you’ll be able to either withdraw your money or redeposit it into another CD product.
• Term Length: The amount of time you’ll need to keep your funds in the CD to avoid penalties.

How Much Interest Will I Earn From a CD?

How much interest you’ll earn on a CD will depend on several things.

• Your Initial Deposit: The more money you deposit into a CD, the more accumulated interest income you will have.
• Annual Percentage Yield (APY): The higher your actual interest rate, the more you’ll earn from your CD.
• Term Length: Some banks offer a higher interest rate for longer-term CDs. However, this isn’t always true. Sometimes, they offer their highest rates on CD terms between six and 18 months. Pay attention to the actual interest rate on different terms to understand which will help you earn the most income.
• Compounding Frequencies: While most banks compound interest daily, some do it monthly. More frequent compounding will help you earn additional interest.

To help you understand how these factors can affect your earnings, let’s compare two CDs side-by-side using the CD calculator. This will help determine how much each would earn.

• CD One: $5,000 deposit into a 24-month CD that compounds daily with a 3.50% APY = $362.52
• CD Two: $7,000 deposit into a 48-month CD that compounds daily with a 3.00% APY = $892.44

What CD Term Length Should I Get?

There used to be a time when the longer the CD term, the higher the interest rate. This would make it worth locking your funds up for a longer term to earn as much interest as possible.

Things have changed, though. Today, many shorter-term CDs have the best interest rates. To understand what CD term length you should use, consider how much interest you can generate, but make sure you won’t need the money before the CD matures.

What is a Good APY on a CD?

As the Federal Reserve continues to lower the Fed Funds rate, interest rates on CDs are going to continue to decline. At one point, it was possible to find 6% CDs. But today, a good APY is going to be around 4.50%.

How to Maximize Your CD Earnings

If you plan to deposit money in a CD, make sure you maximize your earnings. To do this, you should compare multiple banks and CD terms. Online banks usually offer the best rates because they have fewer expenses and can afford to pay more to customers.

You could also consider putting together a CD ladder. This allows you to spread your initial deposit between multiple CD terms, keeping your funds a little more liquid.

If you’re unfamiliar with a CD ladder, it works a little like this.

If you have $10,000 you want to deposit into CDs, spread your deposits into different terms. You could deposit $2,000 each into a one-, two-, three-, four- and five-year CD. As each CD matures, you would reinvest it into a five-year CD. This strategy allows you to keep earning interest on your funds, and because a CD matures each year, you’ll maintain some liquidity if you need the money.