CD Calculator

What is a CD?

A certificate of deposit (CD) is a savings product from a bank or credit union that pays a fixed interest rate in exchange for leaving your money untouched for a set term, usually between three months and five years. At the end of the term, called maturity, you get your deposit back plus the interest it earned.

How this CD calculator works

The calculator grows your deposit month by month at the CD rate and compounding schedule you enter, and shows the annual percentage yield (APY) that combination works out to, rounded to three decimal places.

Balance at maturity = deposit × (1 + rate ÷ n)^{n × years}
Balance (continuous compounding) = deposit × e^{rate × years}
APY = (1 + rate ÷ n)ⁿ − 1

Here n is how many times interest compounds in a year: 1 for annually, 2 for semiannually, 4 for quarterly, and 12 for monthly. If your bank quotes an APY, choose annual compounding and enter the APY as the rate. If it quotes an interest rate (sometimes called the APR) together with a compounding schedule, enter that rate and pick the schedule.

The term can mix years and months. A 1-year, 6-month CD counts as 1.5 years.

Taxes on CD interest

CD interest is generally taxed as ordinary income in the year it is credited, even if you leave it in the CD. If you enter a marginal tax rate, the calculator takes that share out of each month's interest before adding the rest to your balance, so only after-tax interest keeps compounding. The results then show total interest before tax, the tax, and the interest you keep. Leave the tax rate at 0 for a CD inside an IRA or another tax-advantaged account.

Frequently asked questions

How much will a $10,000 CD earn in 3 years?

At a 5% APY, a $10,000 CD grows to 10,000 × 1.05³ = $11,576.25 after three years, which is $1,576.25 of interest before tax. At a 4% APY the same CD would earn $1,248.64.

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

The interest rate is the yearly rate before compounding. The APY is what you actually earn in a year once compounding is included. A 5% rate compounded monthly is an APY of 5.116%. APY is the fairer number for comparing CDs because it already accounts for how often each one compounds.

What happens if I take money out of a CD early?

Most CDs charge an early withdrawal penalty, often several months of interest. This calculator assumes you hold the CD to maturity and does not subtract any penalty.

Do I pay tax on CD interest every year?

Usually yes. For a CD outside a retirement account, interest is reported for the year it is credited to you, not only when the CD matures.

Limitations

The estimate assumes a fixed rate for the whole term, no extra deposits, no early withdrawal, and one flat tax rate. It does not cover variable-rate, bump-up, or callable CDs, or state and local taxes. It is not financial or tax advice.