Certificate of Deposit (CD) Rate Calculator
Calculate your guaranteed returns based on current APY and term length.
Estimated Results at Maturity
How to Use the CD Rate Calculator
Understanding how your money grows in a Certificate of Deposit (CD) is essential for fixed-income planning. This calculator helps you determine exactly how much interest you will accrue by the time your CD reaches maturity. To get an accurate result, you will need the primary deposit amount, the advertised APY, the term length, and the compounding schedule.
Understanding CD Mathematics
CDs use compound interest. Unlike simple interest, compound interest is calculated on the initial principal and also on the accumulated interest of previous periods. The formula used by our calculator is:
A = P (1 + r/n)^(nt)
- A = Final Balance
- P = Initial Deposit (Principal)
- r = Annual Interest Rate (decimal)
- n = Number of compounding periods per year
- t = Time in years
Comparing CD Terms and Returns
The relationship between the term length and the APY is the most significant factor in your total return. Generally, longer terms offer higher APYs because you are committing your capital for a longer period.
| Term Length | Example APY | Interest on $10,000 |
|---|---|---|
| 6 Months | 4.00% | ~$200.00 |
| 1 Year | 4.50% | ~$450.00 |
| 2 Years | 4.25% | ~$868.00 |
| 5 Years | 4.00% | ~$2,166.00 |
Key Factors That Influence Your Earnings
1. APY (Annual Percentage Yield): This is the effective rate of return taking into account the effect of compounding interest. Always use the APY rather than the "nominal rate" for calculations.
2. Compounding Frequency: The more often interest is compounded (e.g., daily vs. annually), the more interest you earn. Most modern high-yield CDs compound daily or monthly.
3. Early Withdrawal Penalties: While not part of the basic growth formula, remember that withdrawing funds before the term ends usually results in a penalty equal to several months of interest, which can eat into your principal.