CD Calculator
Use this free CD calculator to work out what your certificate of deposit is worth at maturity, with compound interest.
Maturity value: —
Total interest earned: —
APY: —
Estimates only — not financial advice. Check your bank’s exact rate, term and early-withdrawal rules.
How to use this CD calculator
Step 1: Enter the amount you plan to deposit. This is the principal, the money the bank holds for the term of the certificate.
Step 2: Enter the annual interest rate your bank quotes, then the term, choosing years or months, and pick how often the interest compounds — monthly, quarterly or annually.
Step 3: Read the results, which update live as you type. You get the maturity value, the total interest earned, and the APY, so you can compare offers from different banks side by side.
Worked example: $10,000 at 5% for 5 years
Deposit $10,000 at 5% for 5 years with monthly compounding and you get a maturity value of $12,833.59, which is $2,833.59 of interest. The APY is 5.12%, a little above the 5% headline rate, because the interest earned each month starts earning interest of its own.
The same deposit at 5% for 5 years with annual compounding gives a maturity value of $12,762.82 and $2,762.82 of interest, with an APY of exactly 5.00%. Monthly compounding adds $70.77 over the five years. That is a small difference on one deposit, but it grows with larger deposits and longer terms, which is why the compounding frequency is worth checking when you compare CDs.
Try a second example: $5,000 at 4%, compounded monthly for 3 years, matures at $5,636.36, earning $636.36 in interest at a 4.07% APY. Change any figure in the calculator above and the results update straight away.
What is a CD?
A CD, or certificate of deposit, is a savings product offered by banks and credit unions. You deposit a lump sum and agree to leave it untouched for a fixed term, which can run from a few months to five years or more. In return the bank pays you a fixed rate of interest, and at the end of the term, the maturity date, you get your deposit back plus the interest it earned.
CD rates are usually higher than the rate on an ordinary savings account, because the bank knows it can rely on your money for the whole term. The trade-off is access: if you take the money out early, most banks charge an early-withdrawal penalty. That makes a CD a good fit for money you know you will not need until the term ends, such as savings for a planned expense a year or two away.
In the United States, CDs from banks are normally insured by the FDIC, and CDs from credit unions by the NCUA, up to the standard insurance limits. That protection, plus a fixed rate that does not move with the market, is why many savers use CDs for the safe part of their savings.
Compounding frequency
Compounding is what happens when the interest your deposit earns is added to the balance and then earns interest itself. The more often interest is added, the faster the balance grows. With monthly compounding, interest is added twelve times a year; with quarterly compounding, four times; with annual compounding, just once.
The difference is modest but real. On $10,000 at 5% for 5 years, monthly compounding earns $70.77 more than annual compounding. The headline rate is the same in both cases, so the only way to see the difference is to compare the APY, the annual percentage yield, which is the effective yearly return once compounding is included. A 5% rate compounded monthly is a 5.12% APY; the same rate compounded annually is a 5.00% APY. When banks advertise a CD, the APY is the number to compare, because it already includes the effect of compounding.
Longer terms make compounding more powerful, because each round of interest has more time to earn interest of its own. That is also why starting early matters: a CD that you roll over, reinvesting the interest each time it matures, grows faster than one where the interest is paid out and spent.
Frequently asked questions
What is a CD?
A CD, or certificate of deposit, is a savings product where you deposit a lump sum for a fixed term and the bank pays you a fixed rate of interest. You get your deposit back plus the interest when the term ends. CD rates are usually higher than ordinary savings rates, because your money is locked away for the term.
What is APY?
APY stands for annual percentage yield. It is the return you actually earn in a year once compounding is included. A 5% interest rate compounded monthly works out to a 5.12% APY, while the same rate compounded annually is a 5.00% APY. When you compare CDs, compare the APY, not just the headline rate.
Does compounding frequency really matter?
Yes, but the effect is modest on small deposits. On $10,000 at 5% for 5 years, monthly compounding earns $70.77 more than annual compounding. The gap grows with bigger deposits and longer terms, so it is worth checking the compounding frequency when two CDs quote the same rate.
What happens if I withdraw early?
Most banks charge an early-withdrawal penalty, often several months of interest, and in some cases the penalty can eat into your original deposit. Check your bank's terms before you open a CD, and only deposit money you are confident you will not need before the term ends.
Is this exact?
No, this calculator gives an estimate. Real CDs may compound differently, and they may have fees or minimum deposits that change the result. Use it to compare offers, then confirm the exact figures, rate, term and early-withdrawal rules with your bank before you open an account.