Understanding Your Certificate of Deposit (CD) Earnings
A Certificate of Deposit (CD) is a savings product offered by banks and credit unions that allows you to earn a fixed interest rate on your deposit for a specified term. CDs typically offer higher interest rates than traditional savings accounts, but your money is locked in for the duration of the term, meaning you'll incur a penalty if you withdraw funds early.
When you open a CD, you'll choose an initial deposit amount, an annual interest rate, and a term (the length of time your money will be held). Our calculator helps you estimate the total earnings you can expect from your NBT Bank CD based on these factors.
How the Calculation Works:
The calculator uses the following formula to estimate your total interest earned:
Estimated Total Earnings = Principal * ( (1 + (Annual Interest Rate / 100) / 12) ^ Term in Months – 1 )
Where:
- Principal: The initial amount of money you deposit.
- Annual Interest Rate: The yearly percentage rate you earn on your deposit. This is divided by 100 to convert it to a decimal and then by 12 to get the monthly rate.
- Term in Months: The total number of months your CD will be held.
This formula compounds your interest monthly, giving you a more accurate projection of your potential earnings.
Example:
Let's say you deposit $10,000 into an NBT Bank CD with an annual interest rate of 4.5% for a term of 24 months.
- Initial Deposit: $10,000
- Annual Interest Rate: 4.5%
- Term: 24 Months
Using the calculator, you would see an estimated total earning of approximately $927.36 over the 24-month term. This means your total balance at the end of the term would be $10,927.36.
Note: This is an estimated calculation. Actual earnings may vary based on NBT Bank's specific compounding frequency and any applicable fees or taxes.
function calculateCDInterest() {
var principal = parseFloat(document.getElementById("principalAmount").value);
var annualRate = parseFloat(document.getElementById("annualInterestRate").value);
var term = parseInt(document.getElementById("termMonths").value);
var resultDiv = document.getElementById("result");
if (isNaN(principal) || isNaN(annualRate) || isNaN(term) || principal <= 0 || annualRate < 0 || term <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyRate = annualRate / 100 / 12;
var totalInterest = principal * (Math.pow(1 + monthlyRate, term) – 1);
var formattedInterest = totalInterest.toFixed(2);
var totalBalance = (principal + totalInterest).toFixed(2);
resultDiv.innerHTML = "
Estimated Earnings
" +
"Total Interest Earned:
$" + formattedInterest + "" +
"Total Balance at Maturity:
$" + totalBalance + "";
}
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