Calculate the estimated earnings on your Certificate of Deposit (CD).
Annually
Semi-annually
Quarterly
Monthly
Daily
Your estimated CD value will appear here.
Understanding Your CD Earnings
A Certificate of Deposit (CD) is a savings product offered by banks and credit unions that provides a fixed interest rate for a specified term. CDs are generally considered safe investments because they are typically insured by the FDIC (up to certain limits) and offer a predictable return. This calculator helps you estimate the future value of your CD based on your initial deposit, the interest rate, the term length, and how often the interest is compounded.
How the Calculation Works
The future value of a CD is calculated using the compound interest formula. Compound interest means that the interest earned is added to the principal, and then the next interest calculation is based on this new, larger principal. This allows your money to grow exponentially over time.
The formula used is:
FV = P (1 + r/n)^(nt)
Where:
FV is the Future Value of the investment/loan, including interest.
P is the Principal investment amount (the initial deposit).
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.
Example Calculation
Let's say you invest $10,000 in a CD with the following terms:
Initial Deposit (P): $10,000
Annual Interest Rate (r): 5.0% (or 0.05 as a decimal)
CD Term (t): 3 Years
Compounding Frequency (n): Quarterly (4 times per year)
So, after 3 years, your initial $10,000 deposit would grow to approximately $11,607.55, meaning you would have earned $1,607.55 in interest.
Why Use a CD Calculator?
Planning: Estimate how much your savings will grow over a specific period.
Comparison: Compare different CD offers from various financial institutions based on their rates and compounding frequencies.
Goal Setting: Determine how long you need to invest a certain amount to reach a financial target.
Understanding Returns: Clearly see the impact of interest rates and compounding on your investment.
Remember that CD rates can vary significantly. It's always a good practice to shop around for the best rates available and to consider factors like early withdrawal penalties before opening a CD.
function calculateCDValue() {
var principal = parseFloat(document.getElementById("initialDeposit").value);
var annualRate = parseFloat(document.getElementById("annualInterestRate").value);
var years = parseFloat(document.getElementById("cdTermYears").value);
var compoundingFrequency = parseInt(document.getElementById("compoundingFrequency").value);
var resultDiv = document.getElementById("result");
if (isNaN(principal) || isNaN(annualRate) || isNaN(years) || isNaN(compoundingFrequency)) {
resultDiv.textContent = "Please enter valid numbers for all fields.";
resultDiv.style.color = "#dc3545"; /* Red for error */
resultDiv.style.backgroundColor = "#fdecea";
resultDiv.style.borderColor = "#dc3545";
return;
}
if (principal <= 0 || annualRate < 0 || years <= 0 || compoundingFrequency <= 0) {
resultDiv.textContent = "Please enter positive values for deposit, years, and frequency, and a non-negative rate.";
resultDiv.style.color = "#dc3545"; /* Red for error */
resultDiv.style.backgroundColor = "#fdecea";
resultDiv.style.borderColor = "#dc3545";
return;
}
var ratePerPeriod = annualRate / 100 / compoundingFrequency;
var numberOfPeriods = compoundingFrequency * years;
var futureValue = principal * Math.pow((1 + ratePerPeriod), numberOfPeriods);
// Format the result to two decimal places
var formattedFutureValue = futureValue.toLocaleString(undefined, {
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
var totalInterest = futureValue – principal;
var formattedTotalInterest = totalInterest.toLocaleString(undefined, {
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
resultDiv.innerHTML = "Estimated Future Value: $" + formattedFutureValue + "" +
"Total Interest Earned: $" + formattedTotalInterest + "";
resultDiv.style.color = "#155724"; /* Dark green for success */
resultDiv.style.backgroundColor = "#d4edda"; /* Light green background */
resultDiv.style.borderColor = "#28a745"; /* Success green border */
}