CD (Certificate of Deposit) Calculator
Project the maturity value of a US certificate of deposit at any APY and term. APY is the effective annual rate banks must disclose under Truth in Savings, so compounding frequency is already baked into the rate.
Value at maturity
£10,500.00
- Interest earned
- £500.00
- Average monthly interest
- £41.67
- Total return
- 5%
CD maturity uses A = P × (1 + APY)^t with t in years. APY is the effective annual rate banks must disclose under Regulation DD, so it already bakes in the compounding frequency. Interest accumulates inside the CD; withdrawing before maturity typically triggers a bank-defined early withdrawal penalty, which this calculator does not estimate.
How to use this calculator
Enter the amount you plan to deposit, the APY shown on the bank disclosure (not the nominal interest rate), and the term in months. The calculator returns the value at maturity and the dollars of interest earned over the term.
How the calculation works
The maturity value is A = P × (1 + APY)^t where P is the deposit, APY is the Annual Percentage Yield as a decimal, and t is the term in years (term in months divided by 12). Because APY is the effective annual rate after compounding, the result is independent of how often the bank compounds inside the term — daily, monthly, or quarterly — as long as the disclosed APY is the same.
Worked example
A $10,000 deposit in a 24-month CD at 5.00% APY: A = 10,000 × (1.05)^2 = $11,025.00. Interest earned over the two-year term is $1,025.00, or about $42.71 per month on average.
Frequently asked questions
What is a CD (certificate of deposit)?
A certificate of deposit is a time-deposit savings product offered by US banks and credit unions. You deposit a lump sum for a fixed term — anywhere from 3 months to 5 years is typical — and the bank pays a fixed rate of interest until maturity. CDs at FDIC-insured banks (or NCUA-insured credit unions) are protected up to $250,000 per depositor, per institution, per ownership category.
What is the difference between APY and APR on a CD?
APR is the nominal annual rate before compounding; APY is the effective annual rate after compounding. Regulation DD (the Truth in Savings Act) requires US banks to advertise CDs in APY so consumers can compare products on a like-for-like basis. This calculator takes APY directly, so you do not need to know the underlying nominal rate or compounding frequency.
What happens if I withdraw before maturity?
Most CDs charge an early withdrawal penalty — commonly a forfeiture of 3 months of interest on short-term CDs, 6 months on mid-term, and up to 12 months on longer-term CDs, though the exact penalty is set by the bank in the account disclosure. The penalty can eat into principal if the CD has not yet earned enough interest to cover it. This calculator assumes the CD is held to maturity.
Is CD interest taxable?
Yes. Interest earned on a CD held in a taxable account is reported on Form 1099-INT and taxed as ordinary income at your federal marginal rate, plus any state tax. Interest is generally taxable in the year it is credited to the account, even if the CD has not yet matured. CDs held inside a Traditional IRA, Roth IRA, or other tax-advantaged account follow that account's tax rules instead.
Should I choose a longer-term CD for a higher rate?
Sometimes — but not always. The yield curve is occasionally inverted, with short-term CDs paying more than long-term ones, especially when investors expect rates to fall. Longer terms also carry more reinvestment risk: you lock in a rate and lose access to the cash. Consider laddering — splitting the deposit across several maturities — to balance rate certainty against liquidity.
How is CD interest different from a high-yield savings account?
A high-yield savings account (HYSA) has a variable APY that can change at any time, but lets you withdraw any amount at any time with no penalty. A CD locks in the APY for the entire term, so you keep the rate even if the market falls, but you cannot access the money without a penalty. CDs make sense when you do not need the cash for the term and want certainty about the rate.