CD Calculator
Calculate interest earned on a single CD, build a CD ladder for regular liquidity, or compare a CD against a high-yield savings account. Works for any currency.
Try a worked example
How to Use This Calculator
Tab "Single CD"
Enter your deposit amount, the APY quoted by the bank, the term in months, and how often interest is compounded. The calculator shows interest earned at maturity, the APR vs APY distinction, and total value at maturity.
Tab "CD Ladder"
Enter your total investment amount and choose 3–5 rungs. The calculator splits the money equally across staggered maturities (3, 6, 9, 12, and 18 months) and shows total interest, blended average yield, and the liquidity schedule — how often a CD matures.
Tab "CD vs Savings"
Enter a deposit amount, the CD rate, the savings / HYSA rate, the term, and the early withdrawal penalty in months. The calculator shows which account earns more, the break-even point for the penalty, and whether the CD advantage justifies locking your money up.
The Formulas
A = P × (1 + r/n)^(n × t)
Where: A = maturity value, P = principal, r = APR (decimal), n = compounding periods/year, t = term in years
APY from APR:
APY = (1 + APR/n)^n − 1
APR from APY (back-calculation):
APR = n × ((1 + APY)^(1/n) − 1)
Interest earned:
Interest = A − P
Early withdrawal penalty:
Penalty = P × (APR / 12) × penalty_months
CD ladder blended yield:
Blended APY = (APY₁ + APY₂ + … + APYₙ) / n
APY is the standard comparison metric for CDs — it reflects actual annual earnings including compounding. Always use APY when comparing CDs at different banks or with different compounding frequencies.
Worked Examples
Example 1 — $25,000 at 4.75% APY for 12 months
A saver puts $25,000 into a 1-year CD at 4.75% APY, compounding monthly.
The saver collects $1,187.50 at maturity — a guaranteed return regardless of what happens to interest rates during the year.
Example 2 — $50,000 CD ladder: 5 rungs
A saver splits $50,000 into five $10,000 CDs at staggered terms and rates:
The ladder provides quarterly liquidity — every 3 months, a rung matures and can be rolled into a new 18-month CD (or redeemed if funds are needed).
Example 3 — CD at 4.75% vs HYSA at 4.25% for $10,000 / 12 months
The CD earns about $41 more over 12 months — but only if held to maturity. Withdraw early and the penalty wipes out most of the advantage. The flexibility of the HYSA is worth the small yield gap if there's any chance you'll need the money.
CD Key Concepts
| Concept | Explanation |
|---|---|
| APY vs APR | APY includes compounding and is always higher than or equal to APR. Use APY to compare CDs. |
| Term | Most common: 3, 6, 9, 12, 18, 24, 36, 60 months. Longer = typically higher rate. |
| Early withdrawal penalty | Typically 3 months (short CDs), 6 months (1-year), 12–18 months (5-year). Penalty comes from interest, not principal. |
| No-penalty CD | Allows withdrawal after a short lock-up (e.g. 6 days). Rates are usually lower than regular CDs. |
| CD ladder | Split deposits across staggered maturities for both higher rates and regular liquidity. |
| Jumbo CD | Minimum deposit $100,000. May offer slightly higher rates; FDIC limit still applies. |
| Callable CD | Bank can redeem before maturity. Usually higher rate but you bear reinvestment risk. |
| Brokered CD | Purchased through a brokerage. Can be sold on secondary market before maturity without penalty. |
| FDIC / NCUA insurance | Up to $250,000 per depositor, per institution. Credit unions use NCUA insurance. |
| CD vs Treasury Bills | T-Bills are backed by the US government; interest exempt from state tax. Compare net-of-tax yields. |
What Is a CD?
A Certificate of Deposit (CD) is a time deposit offered by banks and credit unions. You agree to leave a fixed sum on deposit for a specified term — anything from 30 days to 5 years — and in return the bank guarantees a fixed interest rate. Unlike a savings account, the rate is locked in: it won't change even if the Federal Reserve cuts rates after you open the CD.
CDs are one of the safest savings vehicles available. At FDIC-insured banks, deposits are covered up to $250,000 per depositor per institution, per ownership category. Credit unions offer equivalent protection through the NCUA. The main trade-off is liquidity: your money is locked in until maturity, and early withdrawal triggers a penalty — typically 3 to 18 months of interest depending on the term.
APY vs APR: Why It Matters
When a bank advertises a CD, it quotes APY (Annual Percentage Yield) — the effective annual rate that accounts for compounding. The underlying nominal rate is the APR (Annual Percentage Rate). For example, an APY of 4.75% compounding monthly corresponds to an APR of approximately 4.644%. The difference is small but real: APY is always the correct number to use when comparing CDs from different banks.
More frequent compounding increases your effective yield. A CD compounding daily will earn slightly more than one compounding monthly at the same stated APR. However, because most banks quote APY (not APR), the compounding frequency is already factored in when you use APY to compare.
CD Ladder Strategy
The CD ladder solves the classic dilemma: long-term CDs pay higher rates, but they lock your money away. With a 5-rung ladder, you split your money across five CDs maturing every 3–6 months. When the first rung matures, you roll it into a new long-term CD at the top of the ladder. After a few cycles, all your money is in long-term CDs earning higher rates — but a rung matures regularly, giving you periodic access to cash without penalty.
CD vs High-Yield Savings Account
The competition between CDs and HYSAs (High-Yield Savings Accounts) comes down to: certainty vs flexibility. A CD gives you a locked, guaranteed rate for the full term. A HYSA rate is variable — when the Federal Reserve cuts rates, banks quickly lower HYSA rates, sometimes by 50–100 basis points in a single quarter. If you believe rates will fall, locking in a CD is the smarter move. If you may need the money, the HYSA's full liquidity is worth the yield gap.