Bayport Credit Union CD Rates Calculator
Understanding Certificates of Deposit (CDs) and APY
Certificates of Deposit (CDs) are a popular savings product offered by financial institutions like Bayport Credit Union. They are time deposits that typically offer a higher interest rate than traditional savings accounts in exchange for you agreeing not to withdraw your money for a fixed period, known as the term. This provides a predictable return on your savings.
How APY Works
The Annual Percentage Yield (APY) is the total amount of interest you will earn on a deposit account over one year, expressed as a percentage. APY includes compounding, which means that the interest earned in each period is added to the principal, and then the interest for the next period is calculated on this new, larger principal. This effect can significantly increase your overall earnings over time.
Key Components of a CD Calculation:
- Initial Deposit: This is the principal amount you initially invest in the CD.
- Annual Percentage Yield (APY): This is the stated annual rate of return, including the effects of compounding. For CD calculations, we often use the APY to simplify the process, as it accounts for how often interest is compounded within the year.
- Term: This is the length of time your money is committed to the CD, usually expressed in months or years.
Calculating Your CD's Future Value
Our Bayport Credit Union CD Rates Calculator helps you estimate the future value of your investment. By inputting your initial deposit, the APY offered by Bayport Credit Union, and the term of the CD in months, the calculator will project how much your investment will grow to upon maturity. This is based on the principle of compound interest, where your earnings are reinvested over time, leading to accelerated growth.
Example: Let's say you invest $5,000 (Initial Deposit) in a Bayport Credit Union CD with an APY of 4.5% for a term of 24 months. Our calculator would show you the total amount you would have at the end of those 24 months, including your initial deposit plus all the accumulated interest through compounding.
function calculateCDMaturity() {
var initialDeposit = parseFloat(document.getElementById("initialDeposit").value);
var annualPercentageYield = parseFloat(document.getElementById("annualPercentageYield").value);
var termInMonths = parseInt(document.getElementById("termInMonths").value);
var cdResultsDiv = document.getElementById("cdResults");
if (isNaN(initialDeposit) || isNaN(annualPercentageYield) || isNaN(termInMonths) || initialDeposit <= 0 || annualPercentageYield < 0 || termInMonths <= 0) {
cdResultsDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// APY is an annual rate. To use it for compounding over months, we first need to find the equivalent monthly rate.
// The formula for APY is (1 + periodic_rate)^n – 1, where n is the number of periods in a year.
// If APY is given, we can find the periodic rate assuming monthly compounding (n=12).
// APY = (1 + monthly_rate)^12 – 1
// APY + 1 = (1 + monthly_rate)^12
// (APY + 1)^(1/12) = 1 + monthly_rate
// monthly_rate = (APY + 1)^(1/12) – 1
var monthlyRate = Math.pow((annualPercentageYield / 100) + 1, 1 / 12) – 1;
// Future value formula with monthly compounding: FV = P * (1 + r)^t
// where P is principal, r is monthly rate, and t is total number of months.
var futureValue = initialDeposit * Math.pow(1 + monthlyRate, termInMonths);
var totalInterestEarned = futureValue – initialDeposit;
cdResultsDiv.innerHTML =
"
Maturity Value:
$" + futureValue.toFixed(2) + "" +
"
Total Interest Earned:
$" + totalInterestEarned.toFixed(2) + "";
}
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