CD Calculator
Calculate exactly how much your Certificate of Deposit will earn. Enter your deposit, rate, and term, choose daily, monthly, or quarterly compounding, and see your maturity value, total interest, APY, and after-tax return.
Last updated: July 2026
How This CD Calculator Works
A Certificate of Deposit (CD) pays a fixed interest rate for a fixed term in exchange for locking up your money. This calculator shows exactly what your deposit grows to at maturity, how much interest you earn, and the effective annual yield (APY) — for any deposit, rate, term, and compounding frequency. Enter your numbers above and the results update instantly.
Compounding Frequency: Daily vs. Monthly vs. Quarterly
Compounding is how often earned interest is added back to your balance so it can start earning interest too. More frequent compounding produces a slightly higher return for the same stated rate. The table below shows your current deposit and rate under each common compounding frequency, so you can compare a CD compounded monthly, daily, quarterly, or annually at a glance.
| Compounding | APY | Interest Earned | Maturity Value |
|---|
Based on your current deposit, rate, and term. Your selected frequency is highlighted.
Growth by CD Term Length
Longer terms usually pay higher rates, but they lock your money up longer. Here's what your current deposit and rate would grow to across common CD terms — from a 6-month up to a 5-year CD. (For a true comparison, use the actual rate your bank offers for each term.)
| Term | Interest Earned | Maturity Value |
|---|
APY vs. Interest Rate (APR)
Banks advertise CDs using the APY (Annual Percentage Yield) because it already includes compounding and reflects your true one-year return. The underlying interest rate (APR) is slightly lower. If your bank gave you the APY, keep the "Rate is" toggle on APY; if they quoted a plain interest rate, switch it to APR. This calculator converts between the two using your chosen compounding frequency so both numbers are always correct.
CDs and Taxes
CD interest is taxed as ordinary income in the year it's earned — not the year the CD matures. If you earn $10 or more, your bank issues a Form 1099-INT. For a multi-year CD you'll owe tax on the interest credited each year even though you can't touch the money yet. Enter your marginal tax rate in the advanced section to see your after-tax return. To shelter CD interest from tax, consider an IRA CD — a certificate of deposit held inside a traditional IRA (tax-deferred) or Roth IRA (tax-free).
Early Withdrawal Penalties
Take money out before maturity and you'll typically pay a penalty equal to several months of interest — often 3 months on short CDs and 6 to 12 months on terms of a year or longer. Withdraw early enough and the penalty can dip into your principal. The advanced section lets you model this so you know the true cost of breaking a CD early.
CD Laddering: Access and Yield
Instead of one large CD, a CD ladder splits your money across several CDs with staggered maturities — say 1-, 2-, 3-, 4-, and 5-year terms. Each year one rung matures and you either use the cash or reinvest it into a new 5-year CD. Laddering keeps part of your money accessible every year while still capturing the higher rates of longer terms, and it smooths out the risk of locking everything in right before rates change.
Want to compare a CD against other savings strategies? Try the Compound Interest Calculator to project long-term investment growth, the Savings Goal Calculator to plan a target, or the Inflation Calculator to see how prices erode a fixed return over time.
Frequently Asked Questions
How is CD interest calculated?
A CD earns interest that compounds — each period's interest is added to your balance and then earns interest itself. The formula is Maturity = Deposit × (1 + rate ÷ n)^(n × years), where n is the number of compounding periods per year (365 for daily, 12 for monthly, 4 for quarterly, 1 for annual). Because compounding is built in, the effective yield you actually earn is the APY, which is always equal to or slightly higher than the stated interest rate (APR).
How are CD rates compounded?
Most banks compound CD interest daily or monthly, though some use quarterly or annual compounding. More frequent compounding produces a slightly higher return for the same stated rate. On a $10,000 CD at 5% for one year, daily compounding earns about $513, monthly about $512, quarterly about $509, and annual exactly $500 — a real but small difference. Use the compounding-frequency dropdown above to see the exact impact for your deposit.
What is the difference between APR and APY on a CD?
APR (Annual Percentage Rate) is the simple stated interest rate before compounding. APY (Annual Percentage Yield) folds in the effect of compounding and reflects what you actually earn in a year. Banks are required to advertise the APY so you can compare CDs fairly. This calculator shows both — enter whichever number your bank gave you and switch the 'Rate is' toggle accordingly.
Is CD interest taxed?
Yes. CD interest is taxed as ordinary income in the year it is earned, even if you don't withdraw it until maturity. Your bank sends a Form 1099-INT for any year you earn $10 or more. For multi-year CDs you owe tax on the interest credited each year. Enter your marginal tax rate above to see your estimated after-tax return. Holding a CD inside an IRA lets you defer (traditional) or avoid (Roth) that tax.
Can I hold a CD in an IRA?
Yes. An IRA CD is simply a certificate of deposit held inside a traditional or Roth IRA. It combines the guaranteed, FDIC-insured return of a CD with the tax advantages of a retirement account: traditional IRA CDs grow tax-deferred, and Roth IRA CDs grow tax-free. IRA CDs are popular with retirees who want principal protection for part of their portfolio. Contribution limits and early-withdrawal rules for the IRA still apply on top of the CD's own term.
What happens if I withdraw from a CD early?
Withdrawing before the maturity date almost always triggers an early-withdrawal penalty, usually expressed as a number of months of interest — commonly 3 months for short terms and 6–12 months for terms of a year or more. The penalty can eat into your principal if you withdraw very early. Enter a penalty in the advanced field above to see your net proceeds if you had to cash out early.
Are CDs worth it right now?
CDs make sense when you want a guaranteed, FDIC-insured return on money you won't need for a fixed period, and when CD rates are competitive with other safe options like high-yield savings and Treasury bills. The trade-off is liquidity — your money is locked up for the term, and if rates rise you're stuck at the old rate. A CD ladder (splitting money across staggered terms) is a common way to keep some access while still capturing longer-term rates.