CalcRaven

CD Calculator

A certificate of deposit (CD) grows by its APY each year: ending balance = deposit × (1 + APY) raised to the number of years. For example, $10,000 in a 12-month CD at 4.50% APY grows to $10,450, earning $450 in interest. Enter your deposit, rate and term below to see your CD interest and balance over time.

Figures are before taxes unless you add a tax rate · Works with APY or APR

Calculate CD interest

Interest rate
Banks advertise CDs by APY, which already includes compounding. Use APR if your bank lists an interest rate instead.

Your combined federal and state rate. Leave blank to skip.

How to use the CD calculator

  1. Enter how much you plan to deposit.
  2. Enter the rate. Most banks advertise the APY, so leave APY selected unless your bank quotes an interest rate (APR).
  3. Enter the CD term in months or years, and choose how often interest compounds (daily is the most common).
  4. Optionally, add your tax rate to see what you keep after taxes, then press Calculate.

How CD interest is calculated

Using APY: Balance = Deposit × (1 + APY)years

Using APR: Balance = Deposit × (1 + APR ÷ n)n × years

APY = (1 + APR ÷ n)n − 1

Interest earned = Balance − Deposit

In these formulas, n is the number of times interest compounds each year (365 for daily, 12 for monthly), and rates are written as decimals, so 4.50% is 0.045.

Worked examples

12-month CD at 4.50% APY

$10,000 × (1.045)1 = $10,450.00, so you earn $450.00 in interest.

18-month CD at 4.50% APY

$10,000 × (1.045)1.5 = $10,682.54, earning $682.54.

24-month CD at a 4.40% interest rate, compounded monthly

$10,000 × (1 + 0.044 ÷ 12)24 = $10,918.12. That 4.40% rate works out to an APY of about 4.49%, which is why APY is the better number for comparing CDs.

APY vs. interest rate: which one to compare

The interest rate (APR) is the base rate before compounding. The APY includes compounding, so it shows what you actually earn in a year. Two CDs with the same interest rate can have different APYs if one compounds more often. When comparing CDs, compare APYs.

CD basics worth knowing

Early withdrawal penalties

Taking money out before the CD matures usually costs a penalty, often a set number of months of interest. On a short CD, a penalty can eat into the interest you’ve earned. Check the penalty terms before you open the account.

CD ladders

A CD ladder splits your money across CDs with different terms, such as 6, 12, 18 and 24 months. As each one matures, you can use the cash or reinvest it, so part of your money is always close to available.

Deposit insurance

CDs at FDIC-insured banks are covered up to $250,000 per depositor, per insured bank, for each account ownership category. Credit union CDs have equivalent coverage through the NCUA.

When you’d actually use a CD calculator

  • Parking a house deposit. See how much a 12-month CD adds to your down payment fund while you wait for the right listing.
  • Settling the “savings account or CD?” debate. Run both rates side by side and find out whether locking your money up is worth it.
  • Funding next summer’s road trip. Work out how much to deposit now so the interest covers the gas.

How we calculate

When you enter an APY, the balance grows by (1 + APY) per year, including partial years for terms that aren’t whole years. When you enter an APR, interest compounds at your chosen frequency, and we show the equivalent APY. The schedule shows interest and balance at the end of each month (for terms up to 24 months) or each year. Tax, if entered, is applied to the interest only. Figures assume no withdrawals or added deposits and are rounded to the cent for display.

Frequently asked questions

How much will $10,000 earn in a CD?

It depends on the APY and term. At 4.00% APY, $10,000 earns $400 in one year. Over five years at the same APY it grows to about $12,166.53, because the interest compounds.

What is the difference between APY and interest rate on a CD?

The interest rate is the base rate before compounding. APY includes compounding, so it shows what you actually earn in a year. Compare CDs by APY.

Is CD interest compounded?

Usually, yes. Many banks compound CD interest daily or monthly. When a CD is advertised by APY, the compounding is already built into that number.

How is CD interest taxed?

In the US, CD interest is generally taxed as ordinary income in the year it is credited to your account, even if the CD hasn't matured. Banks typically report it on Form 1099-INT. Check IRS guidance or a tax professional for your situation.

What happens when a CD matures?

Most banks give you a short grace period to withdraw the money or move it. If you do nothing, many CDs renew automatically for the same term at the bank's current rate.

Can you lose money in a CD?

Deposits at FDIC-insured banks and NCUA-insured credit unions are protected up to the insurance limits. The main risk is an early withdrawal penalty, which can reduce your interest if you take money out before the CD matures.