Project your retirement savings growth with fixed-yield certificates.
Projected Total Balance:
Total Earnings from Yield:
Total Growth Percentage:
Understanding IRA CD Yields
An Individual Retirement Account Certificate of Deposit (IRA CD) combines the tax advantages of an IRA with the safety and guaranteed returns of a CD. Unlike standard savings accounts where rates fluctuate, an IRA CD locks in your Annual Percentage Yield (APY) for a specific term length, providing predictable growth for your retirement nest egg.
How the Calculation Works
The calculator uses the standard compound interest formula for APY. Because APY already factors in the frequency of compounding (daily, monthly, or quarterly) into a single annual figure, the formula is:
Final Balance = Principal * (1 + (APY / 100))^Years
Comparison of Typical IRA CD Scenarios
Initial Amount
APY %
Term
Final Balance
6,000
4.00%
1 Year
6,240.00
6,000
4.50%
3 Years
6,846.99
6,000
5.00%
5 Years
7,657.69
Traditional vs. Roth IRA CDs
While the mathematical growth remains the same, the tax implications differ:
Traditional IRA CD: Contributions may be tax-deductible, and you pay taxes on the full amount upon withdrawal during retirement.
Roth IRA CD: Contributions are made with after-tax dollars, but the yield earnings grow tax-free, and qualified withdrawals are not taxed.
Always consider the early withdrawal penalties associated with CDs, which can negate a portion of your accrued earnings if you access the funds before the term expires.
function calculateIRACD() {
var principal = parseFloat(document.getElementById('initialDeposit').value);
var apy = parseFloat(document.getElementById('annualYield').value);
var years = parseFloat(document.getElementById('termDuration').value);
var resultDiv = document.getElementById('iraCdResult');
if (isNaN(principal) || isNaN(apy) || isNaN(years) || principal <= 0 || apy < 0 || years <= 0) {
alert('Please enter valid positive numbers for all fields.');
return;
}
// Formula for APY growth: Total = Principal * (1 + r)^t
var rateDecimal = apy / 100;
var totalBalance = principal * Math.pow((1 + rateDecimal), years);
var totalEarnings = totalBalance – principal;
var growthPercent = (totalEarnings / principal) * 100;
// Display results
document.getElementById('resTotal').innerText = totalBalance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resEarnings').innerText = totalEarnings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resGrowth').innerText = growthPercent.toFixed(2) + '%';
resultDiv.style.display = 'block';
}