Cd Bankrate Calculator

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CD Bankrate Calculator

Months Years

Calculation Results:

Maturity Value: $0.00

Total Interest Earned: $0.00

function calculateCDBankrate() { var initialDeposit = parseFloat(document.getElementById('initialDeposit').value); var apy = parseFloat(document.getElementById('apy').value); var termLength = parseFloat(document.getElementById('termLength').value); var termUnit = document.getElementById('termUnit').value; if (isNaN(initialDeposit) || initialDeposit <= 0) { document.getElementById('maturityValue').innerHTML = 'Please enter a valid initial deposit.'; document.getElementById('totalInterestEarned').innerHTML = ''; return; } if (isNaN(apy) || apy < 0) { document.getElementById('maturityValue').innerHTML = 'Please enter a valid APY.'; document.getElementById('totalInterestEarned').innerHTML = ''; return; } if (isNaN(termLength) || termLength <= 0) { document.getElementById('maturityValue').innerHTML = 'Please enter a valid term length.'; document.getElementById('totalInterestEarned').innerHTML = ''; return; } var apyDecimal = apy / 100; var years; if (termUnit === 'months') { years = termLength / 12; } else { years = termLength; } // Formula for future value with APY: Principal * (1 + APY)^Years var maturityValue = initialDeposit * Math.pow((1 + apyDecimal), years); var totalInterestEarned = maturityValue – initialDeposit; document.getElementById('maturityValue').innerHTML = '$' + maturityValue.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ","); document.getElementById('totalInterestEarned').innerHTML = '$' + totalInterestEarned.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ","); }

Understanding Your CD Bankrate Earnings

A Certificate of Deposit (CD) is a type of savings account that holds a fixed amount of money for a fixed period of time, and in return, the bank pays you interest. CDs are generally considered low-risk investments because they are insured by the FDIC (up to certain limits), making them a popular choice for conservative savers looking for predictable returns.

How CDs Work

When you open a CD, you agree to deposit a specific amount of money for a predetermined "term length," which can range from a few months to several years. In exchange for keeping your money locked up for this period, the bank offers a fixed "Annual Percentage Yield (APY)." The APY is the real rate of return earned on an investment, taking into account the effect of compounding interest.

Unlike a regular savings account where you can withdraw money at any time, withdrawing funds from a CD before its term ends usually incurs a penalty, often in the form of forfeited interest. Once the term matures, you can withdraw your principal plus the earned interest, or you can choose to roll over your funds into a new CD.

Key Components of Your CD Calculation

  • Initial Deposit: This is the principal amount of money you initially invest in the CD. The larger your initial deposit, the more interest you can potentially earn.
  • Annual Percentage Yield (APY): This is the effective annual rate of return, expressed as a percentage. It's crucial because it already accounts for the effect of compounding interest over a year. A higher APY means more earnings.
  • CD Term Length: This is the duration for which your money is locked into the CD. Terms can vary widely, from 3 months to 5 years or even longer. Generally, longer terms tend to offer higher APYs, but they also mean your money is inaccessible for a longer period.

Using the CD Bankrate Calculator

Our CD Bankrate Calculator helps you estimate the future value of your CD and the total interest you'll earn over its term. Simply input:

  1. Your desired Initial Deposit.
  2. The Annual Percentage Yield (APY) you've found (e.g., from a bank's offering or a financial comparison site like Bankrate).
  3. The CD Term Length (in months or years).

The calculator will then instantly show you the estimated Maturity Value (your initial deposit plus all earned interest) and the Total Interest Earned.

Example Calculation:

Let's say you deposit $10,000 into a CD with an APY of 5.00% for a term of 24 months (2 years).

  • Initial Deposit: $10,000
  • Annual Percentage Yield (APY): 5.00% (or 0.05 as a decimal)
  • CD Term Length: 2 years

Using the formula: Maturity Value = Initial Deposit * (1 + APY)^Years

Maturity Value = $10,000 * (1 + 0.05)^2

Maturity Value = $10,000 * (1.05)^2

Maturity Value = $10,000 * 1.1025

Maturity Value = $11,025.00

Total Interest Earned = $11,025.00 - $10,000 = $1,025.00

This calculator helps you quickly compare different CD offerings and understand how various APYs and term lengths can impact your savings goals.

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