CD (Certificate of Deposit) Calculator
Use this professional CD calculator to estimate maturity value, interest earned, effective APY, taxes, and early-withdrawal penalties for any term or compounding scenario.
CD Details
APY includes compounding. Use nominal + compounding for stated rates.
Reinvested interest compounds; paid-out interest does not.
Advanced options
Estimate after-tax interest based on your marginal rate.
Enter month of withdrawal (optional).
Common penalties range 3–12 months of interest.
Projected balance at maturity
Results are estimates for planning. Actual bank terms, taxes, and penalties may vary.
How to Use This Calculator
Enter deposit, choose APY or a nominal rate plus compounding frequency, set the term, and select whether interest compounds or is paid out monthly. Optionally add tax and early-withdrawal inputs to see net outcomes. Click Calculate or adjust any field to refresh the results instantly.
Methodology
The calculator computes compound growth using either the effective APY or a nominal rate paired with its compounding frequency. If interest is paid out monthly, it multiplies the effective monthly rate by the number of months instead of growing the balance. After-tax and early-withdrawal rows adjust the outputs using provided penalty and tax assumptions.
Data Source and Methodology
Primary reference: eCFR, Title 12 — Banks and Banking, Part 1030 (Truth in Savings), Appendix A — Annual Percentage Yield (APY) Formula. Latest version available at https://www.ecfr.gov/current/title-12/chapter-X/part-1030/appendix-Appendix A to Part 1030.
All calculations follow the APY definitions and compound interest relationships established by these regulations. Monthly payment estimates derive from either the supplied APY or nominal + compounding combination, depending on the chosen mode.
Tutti i calcoli si basano rigorosamente sulle formule e sui dati forniti da questa fonte.
Glossary of Variables
- P (Principal)
- The initial deposit amount you place in the CD.
- APY
- Annual Percentage Yield, the effective annual return including compounding.
- i (Nominal rate)
- The stated annual interest rate without compounding.
- m (Compounding frequency)
- Number of compounding periods per year (1, 2, 4, 12, 365).
- t
- Term in years; t = months ÷ 12.
- M
- Term in months.
- r_m
- Effective monthly rate derived from APY or nominal+compounding.
- A
- Maturity value (principal plus interest).
- I
- Total interest earned over the period.
- τ (tau)
- Marginal tax rate as a decimal (e.g., 0.24 = 24%).
- p
- Penalty months of interest used for early-withdrawal estimate.
How It Works: A Step-by-Step Example
Suppose you deposit P = $10,000 at APY = 5.00% for M = 18 months (t = 1.5 years), with reinvestment.
- Compute maturity using APY: A = P × (1 + APY)^t = 10,000 × (1.05)^1.5 ≈ $10,759.37.
- Total interest I = A − P ≈ $759.37.
- Annualized return over the term: EAR_term = (A / P)^(1/t) − 1 ≈ 5.00%.
- If interest were paid out monthly, use r_m = (1 + 0.05)^(1/12) − 1 ≈ 0.4074% per month; I ≈ 10,000 × 0.004074 × 18 ≈ $733.32; A ≈ $10,733.32.
Frequently Asked Questions (FAQ)
How accurate is this CD calculator?
It applies standard APY/compound interest formulas and the Truth in Savings definition. Bank-specific conventions may cause small differences.
Should I enter APY or nominal rate?
If your bank quotes APY, choose the APY mode. If it quotes a nominal rate, select the stated compounding frequency to derive the effective yield.
What term length should I choose?
Match the CD's advertised term. Use the advanced early-withdrawal fields to estimate penalties if you plan to cash out before maturity.
How is tax handled in this tool?
The tool applies your marginal tax rate to interest to estimate after-tax earnings. Taxes vary by jurisdiction; consult a professional.
Can penalties reduce my principal?
Yes, if accrued interest is less than the penalty, some banks deduct the difference from principal. The net values may fall below the initial deposit.
Does interest paid out monthly compound?
No. If you choose paid-out interest, earnings do not reinvest, so maturity is lower than a compounding CD with the same rate and term.
What’s the best compounding frequency?
More frequent compounding yields slightly higher returns. Many banks compound daily, so use the frequency your bank specifies.