CD Calculator

Find out what a certificate of deposit will be worth when it matures, and how much interest it earns along the way.

Banks advertise CDs by APY. Use "interest rate" only if that's what you were quoted.

Balance at maturity
$10,425.00
Interest earned
$425.00
APY
4.25%
Effective return over the term
4.25%
  • CD interest is taxable as ordinary income in the year it's credited, even if you don't withdraw it.

Growth over the term

MonthInterest to dateBalance
1$34.74$10,034.74
2$69.61$10,069.61
3$104.60$10,104.60
4$139.71$10,139.71
5$174.94$10,174.94
6$210.29$10,210.29
7$245.76$10,245.76
8$281.36$10,281.36
9$317.09$10,317.09
10$352.93$10,352.93
11$388.90$10,388.90
12$425.00$10,425.00

How CD interest works

A certificate of deposit pays a fixed rate in exchange for leaving your money untouched for a set term — commonly 3 months to 5 years. Interest compounds, usually daily or monthly, and is added to the balance, so you earn interest on your interest.

Banks quote CDs by APY, the annual percentage yield, which already includes the effect of compounding. That makes APY the fairest way to compare CDs: a 4.25% APY earns 4.25% over a year whether the bank compounds daily or monthly.

Things to check before opening a CD

Early withdrawal penalties are typically several months of interest and can eat into principal on short terms. Check whether the rate is fixed for the whole term, what happens at maturity (many CDs renew automatically at the then-current rate), and that the bank or credit union is FDIC- or NCUA-insured.

If you might need the money before the term ends, compare against a high-yield savings account or a no-penalty CD.

The CD formula

Balance = Deposit × (1 + APY)^(months ÷ 12)APY = (1 + rate ÷ n)^n − 1 (when converting an interest rate)
  • n = compounding periods per year (365 daily, 12 monthly, 4 quarterly)

Example

  1. $10,000 in a 12-month CD at 4.25% APY.
  2. Balance = 10,000 × 1.0425 = $10,425.00.
  3. Interest earned: $425.00. Over 18 months it would be 10,000 × 1.0425^1.5 = $10,644.23.

Frequently asked questions

What's the difference between APY and the interest rate?

The interest rate (APR) is the nominal annual rate before compounding. APY is what you actually earn in a year once compounding is included, so it's always equal to or higher than the interest rate.

Is CD interest taxed?

Yes. In the US, CD interest is taxed as ordinary income in the year it's credited to your account, and your bank reports it on Form 1099-INT. CDs held in an IRA follow the IRA's tax rules instead.

Are CDs safe?

CDs at FDIC-insured banks and NCUA-insured credit unions are protected up to $250,000 per depositor, per institution, per ownership category.

What happens when a CD matures?

You usually get a grace period (often 7–10 days) to withdraw or move the money. If you do nothing, many CDs renew for the same term at the current rate.

Sources

Last reviewed for 2026. How we calculate.