CD Calculator
Calculate earnings on a Certificate of Deposit with your chosen term and rate.
$10,511.62
at maturity after 12 months
Principal
$10,000
Interest Earned
$511.62
APY
5.116%
Early Withdrawal Est.
-$255.81
Early withdrawal penalty estimate is ~6 months of interest (varies by bank).
Formula
Calculates final CD balance using compound interest over the term.
A = P(1 + r/n)^(nt)
Where n = compounding periods per year, typically 12 for monthly.
Worked Example
You deposit $10,000 in a 1-year CD at 5.25% APY, compounded daily:
- Principal: $10,000
- APY: 5.25%
- Term: 1 year
- Final balance: $10,525
- Interest earned: $525
Common Questions
What's the difference between a CD and a savings account?
CDs lock your money for a term (3 months–5 years) and pay higher interest. Savings accounts are liquid. Choose CDs for money you won't need soon; savings for emergency funds.
What if I withdraw early?
You'll pay an early withdrawal penalty, typically 3–6 months of interest. Only open a CD if you're committed to the term.
Should I ladder my CDs?
Yes. Buy multiple CDs with staggered terms (1, 2, 3, 5 years). As each matures, you can reinvest at current rates. This hedges interest rate risk.
Key Takeaways
- CDs are FDIC-insured up to $250k—one of the safest investments.
- 5.25% on $10k for 1 year is $525 risk-free—better than stock market for short-term savings.
- Compare rates across banks; some online banks offer 5.5%+ while traditional banks offer 0.1%.