CD Calculator
Work out how much a certificate of deposit (CD) will earn by maturity from the deposit, APY or interest rate and term, with taxes and the cost of an early withdrawal penalty
Last updated: November 12, 2026
How to Use the CD Calculator
How to use the CD calculator
- Enter your deposit. This is the amount you put into the CD at the start.
- Enter the rate. Choose APY if you are copying the rate a bank advertises, which is most common. Choose interest rate (APR) and the compounding frequency if that is what your bank lists.
- Enter the term in months or years, such as 6 months, 12 months or 5 years.
- Add taxes or an early withdrawal (optional). Open the advanced options to see interest after tax, or what you would receive if you closed the CD after a certain number of months.
The results show the balance at maturity, the interest earned, the APY, the average interest per month and a table of how the balance grows. The calculator assumes the interest stays in the CD until it matures.
CDs at banks insured by the FDIC (or at credit unions insured by the NCUA) are protected up to $250,000 per depositor, per institution, for each ownership category.
Formula & Methodology
How CD interest is calculated
A certificate of deposit (CD) pays a fixed rate on money you leave in the bank for a set term. Interest is added to the balance and then earns interest itself, which is called compounding.
When the bank quotes an APY (annual percentage yield), compounding is already built in, so the balance at maturity is:
Balance = Deposit × (1 + APY)^(Months ÷ 12)
When the bank quotes a nominal interest rate with a compounding frequency, the APY is:
APY = (1 + Rate ÷ n)ⁿ − 1
where n is the number of compounding periods a year (365 for daily, 12 for monthly).
Worked example
You put $10,000 into a 12-month CD paying 4.25% APY:
10,000 × (1.0425)¹ = $10,425, so you earn $425 in interest.
Over 5 years at the same APY, it grows to 10,000 × 1.0425⁵ ≈ $12,313.47, earning $2,313.47.
APY vs interest rate
The interest rate is the base rate, and the APY is what you actually earn in a year after compounding. A 4.17% rate compounded daily works out to about a 4.26% APY. Always compare CDs by APY, since it puts every account on the same footing.
Early withdrawal penalties
Taking money out before the CD matures usually costs a penalty stated as months of interest. A common way banks work it out is:
Penalty = Deposit × Interest rate × Penalty months ÷ 12
On a $10,000 CD at about 4.17%, a 3-month penalty is about $104. If you withdraw very early, the penalty can be larger than the interest earned, and part of your deposit is taken to cover it.
Taxes on CD interest
CD interest in a regular account is taxed as ordinary income in the year it is earned, even if you do not withdraw it. CDs held in an IRA grow tax-deferred or tax-free instead.
About CD Calculator
Our cd calculator is a free, easy-to-use tool designed to help you work out how much a certificate of deposit (cd) will earn by maturity from the deposit, apy or interest rate and term, with taxes and the cost of an early withdrawal penalty. For professionals or those who need quick calculations, our calculator provides accurate results instantly.
Frequently Asked Questions
How much interest will a $10,000 CD earn?
At 4.25% APY, a $10,000 CD earns $425 in 12 months and about $2,313 over 5 years if the interest stays in the CD. At 3% APY it earns $300 in a year. Enter your own rate and term to see the exact figure.
What is the difference between APY and interest rate?
The interest rate is the base rate the bank pays. The APY includes the effect of compounding during the year, so it is slightly higher when interest compounds more than once a year. APY is the best number for comparing CDs.
How is CD interest calculated?
With an APY, the balance at maturity equals the deposit times (1 + APY) raised to the number of years. For a 6-month CD, the power is 0.5. Banks compound daily or monthly, and the APY already reflects that.
What happens if I withdraw from a CD early?
Most banks charge a penalty equal to a set number of months of interest, often 3 to 12 months depending on the term. If you have not earned that much interest yet, the bank may take the difference from your deposit.
Is CD interest taxable?
Yes. In a regular account, CD interest is taxed as ordinary income each year, and the bank sends you a 1099-INT form. Interest earned inside an IRA CD is tax-deferred or tax-free, depending on the type of IRA.
Are CDs a safe investment?
CDs at FDIC-insured banks or NCUA-insured credit unions are protected up to $250,000 per depositor, per institution, per ownership category. The main risks are early withdrawal penalties and inflation reducing the real value of your interest.
Is a CD better than a high-yield savings account?
A CD locks in a fixed rate for the whole term, which helps when rates may fall, but you cannot easily take the money out. A high-yield savings account lets you withdraw any time, but its rate can change. Many savers use both.
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