CD Calculator
Enter your deposit, APY, and term to see exactly how much your certificate of deposit will earn.
Results
Maturity Value
$10,512.67
Interest Earned
$512.67
Effective APY
5.127%
Avg Monthly Interest
$42.72
Return on Deposit
5.13%
How CD Interest Is Calculated
A certificate of deposit (CD) earns a fixed interest rate for a set term, then returns your principal plus interest at maturity. The calculation uses the compound interest formula A = P(1 + r/n)^(nt), where P is your deposit, r is the annual rate as a decimal, n is the compounding frequency, and t is the term in years. A $10,000 CD at 5.00% APY for 12 months compounded daily grows to $10,512.67 — earning $512.67 in interest on a federally insured deposit.
Banks advertise APY (Annual Percentage Yield), which already accounts for compounding and makes comparison straightforward. Always compare APY to APY, not APR to APY. For the same stated rate, daily compounding produces slightly more than monthly, which beats annual, though the difference on a 12-month CD is usually less than $1 per $10,000. What matters far more is the rate itself.
CD terms typically run from 3 months to 5 years. Longer terms usually offer higher rates to compensate for locking up your funds. The trade-off is liquidity: most CDs charge an early withdrawal penalty of 60–180 days of interest if you redeem early. On a 2-year CD at 4.5%, breaking it after 6 months could cost $337 on a $10,000 deposit — wiping out most of your gains. Confirm the penalty terms before committing to a longer term.
All CDs held at FDIC-member banks are insured up to $250,000 per depositor, per institution. For amounts above that, consider spreading funds across multiple banks or using a brokered CD. CD interest is taxed as ordinary income in the year it is credited, even if you do not withdraw it — keep this in mind when comparing CDs to tax-advantaged accounts like I-bonds or municipal bonds.
Frequently Asked Questions
What is a good CD rate right now?
CD rates move with the federal funds rate. In 2025–2026, high-yield CDs at online banks and credit unions have offered 4.5–5.5% APY on 6–18 month terms — well above the national average. To find the best current rate, compare offers from online banks, credit unions, and brokerage CDs (which trade on secondary markets). Even a 0.5% rate difference on $25,000 over 2 years adds up to $250.
What happens when a CD matures?
At maturity, most banks automatically roll your CD into a new one of the same term at the prevailing rate, unless you specify otherwise. You typically have a 7–10 day grace period after maturity to withdraw without penalty. Set a calendar reminder when you open the CD so you can compare rates and decide whether to renew, move funds, or cash out.
Should I do one large CD or a CD ladder?
A CD ladder splits your money across multiple terms (e.g. 3, 6, 12, 18, and 24 months). This gives you liquidity every few months while keeping most of your money earning higher long-term rates. As each CD matures, you can reinvest at current rates or use the funds if needed. Laddering is generally better than one large CD unless you are certain you won't need the money and long-term rates are clearly superior.
Is a CD better than a high-yield savings account?
CDs lock in a rate for a fixed term, protecting you if rates fall. High-yield savings accounts (HYSAs) are flexible but their rates float. When rates are expected to fall, locking in a CD can be smart. When rates are expected to rise, an HYSA keeps your options open. Currently, the best HYSAs and short-term CDs are priced similarly — if you don't need the money for 12+ months, a CD gives rate certainty.