A Certificate of Deposit (CD) is a savings product that offers a fixed interest rate for a specified term. If you withdraw funds before the maturity date, you typically incur an early withdrawal penalty. This calculator helps you estimate the penalty you might face.
This is usually stated in your CD agreement (e.g., 90 days interest, 180 days interest).
function calculatePenalty() {
var cdAmount = parseFloat(document.getElementById("cdAmount").value);
var apy = parseFloat(document.getElementById("apy").value);
var termMonths = parseInt(document.getElementById("termMonths").value);
var withdrawalMonths = parseInt(document.getElementById("withdrawalMonths").value);
var penaltyDays = parseInt(document.getElementById("penaltyDays").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(cdAmount) || isNaN(apy) || isNaN(termMonths) || isNaN(withdrawalMonths) || isNaN(penaltyDays) ||
cdAmount <= 0 || apy <= 0 || termMonths <= 0 || withdrawalMonths < 0 || penaltyDays = termMonths) {
resultDiv.innerHTML = "You have reached or passed the maturity date. No early withdrawal penalty applies.";
return;
}
// Calculate daily interest rate
var dailyRate = (apy / 100) / 365;
// Calculate the interest that would have been earned by the penalty period
var penaltyInterestEarned = cdAmount * dailyRate * penaltyDays;
// Calculate the interest earned up to the withdrawal date
// Assuming simple interest for simplicity up to the point of withdrawal for calculation purposes.
// A more precise calculation would consider compounding daily, but for penalty estimation, this is sufficient.
var interestEarnedToWithdrawal = cdAmount * dailyRate * (withdrawalMonths * 30.42); // Average days per month
// The penalty is typically a forfeiture of a certain period of interest.
// Some institutions might charge a percentage of the principal or the earned interest.
// Here we assume the penalty is the forfeiture of the interest that would have been earned during the penalty period.
// This can be interpreted as: if you are penalized for X days, you lose X days worth of interest.
var penaltyAmount = penaltyInterestEarned;
// Ensure penalty doesn't exceed earned interest (if applicable, some banks allow partial withdrawal and penalty applies to withdrawn amount)
if (penaltyAmount > interestEarnedToWithdrawal) {
penaltyAmount = interestEarnedToWithdrawal; // You can't lose more interest than you earned.
}
// Display results
var outputHTML = "
Estimated Penalty
";
outputHTML += "CD Principal Amount: $" + cdAmount.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
outputHTML += "APY: " + apy.toFixed(2) + "%";
outputHTML += "CD Term: " + termMonths + " months";
outputHTML += "Months Since Opened: " + withdrawalMonths + "";
outputHTML += "Penalty Period: " + penaltyDays + " days";
outputHTML += "Estimated Interest Forfeited (Penalty):$" + penaltyAmount.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
outputHTML += "Estimated Interest Earned to Date: $" + interestEarnedToWithdrawal.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
outputHTML += "Note: This is an estimation. Actual penalties may vary based on your bank's specific terms and conditions. Some banks may also charge a fee based on a percentage of the principal withdrawn.";
resultDiv.innerHTML = outputHTML;
}