Calculate your certificate of deposit returns based on current market rates.
Months
Years
Daily
Monthly
Quarterly
Annually
Your CD Estimates
Total Interest Earned:$0.00
Ending Balance:$0.00
How to Maximize Your CD Returns
A Certificate of Deposit (CD) is a low-risk savings tool that offers a fixed interest rate for a specific period. Unlike a standard savings account, a CD requires you to keep your money locked away until the "maturity date" to avoid early withdrawal penalties.
Understanding CD Rates and APY
The Annual Percentage Yield (APY) represents the real rate of return on your deposit, accounting for the effect of compounding interest. The more frequently interest compounds (daily vs. annually), the higher your total return will be. For example, a $10,000 deposit at a 5.00% APY for one year will earn slightly more if compounded daily than if compounded annually.
Example Calculation
If you invest $25,000 in a 24-month CD with a 4.50% APY compounded monthly:
Initial Principal: $25,000
Total Interest: $2,348.87
Final Balance: $27,348.87
What to Consider Before Opening a CD
Before committing your capital, consider the following factors highlighted by financial experts:
Inflation Risk: If inflation rises faster than your CD rate, your purchasing power may decrease.
Liquidity: Ensure you won't need the cash before the term ends, as penalties can sometimes exceed the interest earned.
CD Ladders: Consider splitting your investment into multiple CDs with different maturity dates (e.g., 6 months, 12 months, 18 months) to maintain access to cash while capturing higher long-term rates.
function calculateCD() {
var principal = parseFloat(document.getElementById('cdDeposit').value);
var apy = parseFloat(document.getElementById('cdApy').value) / 100;
var term = parseFloat(document.getElementById('cdTerm').value);
var termUnit = document.getElementById('cdTermUnit').value;
var compounding = parseFloat(document.getElementById('cdCompounding').value);
if (isNaN(principal) || isNaN(apy) || isNaN(term) || principal <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Convert term to years for the formula
var timeInYears = (termUnit === "months") ? (term / 12) : term;
// Formula: A = P(1 + r/n)^(nt)
// Note: APY already includes compounding effects in its definition,
// but most bank calculators for "Rate" use the periodic rate.
// To match Nerdwallet/standard financial logic:
// We use the compound interest formula where r is the nominal rate.
// However, since users input APY, we calculate based on the APY formula.
var totalValue = principal * Math.pow((1 + apy/compounding), (compounding * timeInYears));
var interestEarned = totalValue – principal;
document.getElementById('resInterest').innerText = "$" + interestEarned.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = "$" + totalValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('cdResults').style.display = 'block';
}