Understanding Chase Certificate of Deposit (CD) Accounts
A Certificate of Deposit (CD) is a savings product offered by banks and credit unions that provides a fixed interest rate over a set period of time. Unlike a regular savings account, you agree to leave your money deposited for the entire term, and in return, you typically receive a higher interest rate. Chase offers a variety of CD terms and rates to help you grow your savings.
How Chase CD Interest is Calculated
The projected interest earned on your Chase CD is calculated using the compound interest formula. Compound interest means that the interest earned in each period is added to the principal, and then the next period's interest is calculated on this new, larger principal. This allows your money to grow at an accelerating rate over time.
The formula used in this calculator is a variation of the compound interest formula, often referred to as the future value of an investment with discrete compounding:
FV = P * (1 + r/n)^(nt)
Where:
FV is the Future Value of the investment/loan, including interest.
P is the Principal amount (the initial deposit amount).
r is the Annual interest rate (as a decimal).
n is the number of times that interest is compounded per year (compounding frequency).
t is the number of years the money is invested or borrowed for.
To calculate just the interest earned, we subtract the principal from the future value: Interest Earned = FV – P.
In our calculator:
P corresponds to the Initial Deposit Amount.
r corresponds to the Annual Interest Rate (divided by 100 to convert percentage to decimal).
n corresponds to the Compounding Frequency (Annually=1, Semi-Annually=2, Quarterly=4, Monthly=12, Daily=365).
t is derived from the Term (in Months), calculated as termMonths / 12.
Why Use a CD Calculator?
Compare Options: Easily compare different Chase CD rates and terms to find the best fit for your savings goals.
Estimate Growth: Get a clear estimate of how much interest your deposit could earn over the CD's term.
Financial Planning: Use the projections to aid in your short-term and long-term financial planning.
Understand Compounding: See the power of compounding interest in action and how different compounding frequencies can impact your earnings.
When considering a CD with Chase or any financial institution, pay close attention to the Annual Percentage Yield (APY), which reflects the total amount of interest you will earn in a year, including compounding. This calculator provides a close approximation of that potential growth.
function calculateCDInterest() {
var principalAmount = parseFloat(document.getElementById("principalAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var termMonths = parseFloat(document.getElementById("termMonths").value);
var compoundingFrequency = parseInt(document.getElementById("compoundingFrequency").value);
var resultDiv = document.getElementById("result");
var resultValueDiv = document.getElementById("result-value");
// Clear previous results and error messages
resultValueDiv.innerText = "–";
resultDiv.style.borderColor = "#28a745"; // Reset to success color
// Input validation
if (isNaN(principalAmount) || principalAmount <= 0) {
resultValueDiv.innerText = "Please enter a valid initial deposit.";
resultDiv.style.borderColor = "#dc3545"; // Error color
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
resultValueDiv.innerText = "Please enter a valid annual interest rate.";
resultDiv.style.borderColor = "#dc3545";
return;
}
if (isNaN(termMonths) || termMonths <= 0) {
resultValueDiv.innerText = "Please enter a valid term in months.";
resultDiv.style.borderColor = "#dc3545";
return;
}
if (isNaN(compoundingFrequency) || compoundingFrequency <= 0) {
resultValueDiv.innerText = "Please select a valid compounding frequency.";
resultDiv.style.borderColor = "#dc3545";
return;
}
// Convert annual rate to decimal
var rateDecimal = annualInterestRate / 100;
// Calculate time in years
var timeYears = termMonths / 12;
// Calculate future value using compound interest formula
// FV = P * (1 + r/n)^(nt)
var futureValue = principalAmount * Math.pow(1 + (rateDecimal / compoundingFrequency), compoundingFrequency * timeYears);
// Calculate interest earned
var interestEarned = futureValue – principalAmount;
// Display the result
resultValueDiv.innerText = "$" + interestEarned.toFixed(2);
resultDiv.style.borderColor = "#28a745"; // Ensure success color if calculation is valid
}