CD Calculator

Calculate returns on Certificates of Deposit, build CD ladders, and compare CD offers from different institutions to maximize your savings.

CD Details

Initial Deposit ($)

Annual Interest Rate (%)

Term Length

Compounding Frequency

CD Returns

Final Balance

$10,512.67

Interest Earned

$512.67

APY

5.13%

Month	Balance	Interest Earned
1	$10,041.75	+$41.75
3	$10,125.78	+$125.78
5	$10,210.50	+$210.50
7	$10,295.94	+$295.94
9	$10,382.09	+$382.09
11	$10,468.97	+$468.97
12	$10,512.67	+$512.67

Understanding CDs

What is a Certificate of Deposit?

A CD is a savings product that earns interest on a lump sum for a fixed period of time. In exchange for locking up your money, banks typically offer higher interest rates than regular savings accounts.

• FDIC insured up to $250,000 per depositor
• Fixed interest rate for the entire term
• Terms typically range from 3 months to 5 years
• Early withdrawal penalties apply

APY vs Interest Rate

APY (Annual Percentage Yield) reflects the total interest you'll earn in one year, including the effect of compounding. A CD with 5% APY that compounds daily will earn slightly more than one compounding annually.

Compounding Frequency Impact

$10,000 at 5% for 1 year:

• Annual: $10,500.00
• Quarterly: $10,509.45
• Daily: $10,512.67

CD Ladder Strategy

How CD Laddering Works

Instead of putting all your money in one CD, divide it among several CDs with staggered maturity dates. When the shortest-term CD matures, reinvest it in a new long-term CD.

Example: With $25,000, you might buy five $5,000 CDs maturing in 1, 2, 3, 4, and 5 years. After year one, you'll have a CD maturing every year while earning higher long-term rates.

Benefits of Laddering

• Regular access to funds as CDs mature
• Capture higher long-term rates
• Reduce interest rate risk
• Avoid early withdrawal penalties
• Flexibility to adjust to rate changes

Types of CDs

Traditional CD

Fixed rate for a fixed term. Most common type. Early withdrawal incurs a penalty (typically 3-6 months of interest).

No-Penalty CD

Allows early withdrawal without penalty. Rates are usually lower than traditional CDs but offer more flexibility.

Bump-Up CD

Option to increase your rate once if rates rise. Good in rising rate environments but starts with lower initial rate.

Jumbo CD

Requires large minimum deposit ($100,000+). Often offers higher rates than standard CDs.

Brokered CD

Purchased through a brokerage. Can shop multiple banks, may have higher rates, tradeable on secondary market.

IRA CD

CD held within an Individual Retirement Account. Tax-advantaged growth but subject to IRA contribution limits and rules.

Current CD Rate Environment

3-Month CD

~5.00%

Top rates

1-Year CD

~5.25%

Frequently Asked Questions

What happens when my CD matures?

You'll have a grace period (usually 7-10 days) to withdraw funds or choose a new CD. If you do nothing, most banks automatically renew your CD at the current rate for the same term. Set a reminder!

How are CD earnings taxed?

CD interest is taxable as ordinary income in the year it's earned, even if you don't withdraw it. You'll receive a 1099-INT form. Consider IRA CDs for tax-deferred growth.

Are online bank CDs safe?

Yes, as long as they're FDIC insured. Online banks often offer higher rates because they have lower overhead costs. Verify FDIC insurance at fdic.gov before depositing.

Should I wait for rates to rise before buying a CD?

It's difficult to time interest rates. A CD ladder strategy helps you capture current rates while maintaining flexibility to reinvest at higher rates if they rise.

Tips for Maximizing CD Returns

• Shop around: Online banks often offer higher rates than local banks
• Consider credit unions: Sometimes offer competitive rates to members
• Watch for promotions: Banks run special rates for new customers
• Build a ladder: Maximize returns while maintaining liquidity
• Set maturity reminders: Avoid auto-renewal at lower rates
• Check early withdrawal penalties: They vary significantly by bank