Finance Calc App

CD calculator

See what a CD (certificate of deposit) will be worth at maturity — the interest earned and effective annual yield. FDIC-insured savings at a fixed rate for a fixed term.

By Mitch Duncan Last reviewed Methodology

Deposit details

Many CD products pay interest at maturity or annually. Choosing more frequent compounding raises the effective yield if interest is added to the balance rather than paid out.

Value at maturity
$10,920.25
Interest earned
$920.25
Breakdown
Deposit
$10,000.00
Nominal rate
4.50%
Effective annual yield (APY)
4.50%
Term
2 years
Your US CD

Protection: FDIC-insured up to $250,000 per depositor, per bank.

Tax: Interest is taxable as ordinary income each year it's earned (you'll receive a 1099-INT), even on multi-year CDs.

Figures assume the rate is fixed for the whole term and interest is left to compound (unless you pick "at maturity"). Early withdrawal usually forfeits some interest or isn't permitted. This is an estimate, not financial advice.

Want the full picture? Dollar-Cost Averaging Explained →

How a CD (certificate of deposit) works

A certificate of deposit (CD) is a savings product where you lock a deposit with a bank or credit union for a fixed term — typically 3 months to 5 years — at a fixed rate. In return you usually earn more than a regular savings account, and the deposit is FDIC-insured up to $250,000 per depositor, per bank.

Maturity value = deposit × (1 + APY ÷ n)^(n × years)

APY is the figure to compare

US banks advertise the Annual Percentage Yield (APY), which already bakes in compounding — so it's the honest like-for-like number when shopping between CDs. Compounding is often daily or monthly; the calculator lets you model annual, quarterly, monthly, or interest paid at maturity.

Early-withdrawal penalties

Take money out before the term ends and you'll typically forfeit several months' interest. "No-penalty CDs" exist but pay lower rates. Some savers build a CD ladder — splitting cash across CDs maturing at staggered dates — to keep some money accessible while still capturing longer-term rates.

Tax

CD interest is taxable as ordinary income in the year it's earned, even on multi-year CDs where you don't receive it until maturity. Your bank issues a 1099-INT. Holding a CD inside an IRA defers or shelters that tax.

What this calculator doesn't cover

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Frequently asked questions

How is a term deposit's maturity value calculated?
Compound the deposit at the fixed rate over the term: maturity = deposit × (1 + rate ÷ n)^(n × years), where n is how often interest compounds per year. If interest is paid out each period instead of added, it's simple interest: deposit × (1 + rate × years). The calculator above does both depending on the compounding option you pick.
What's the difference between the nominal rate and the effective yield?
The nominal rate is the advertised headline rate. The effective annual yield reflects compounding — if interest is added to the balance monthly or quarterly and left there, it earns interest itself, so you end up slightly ahead of the headline rate over a year. If interest is paid out to another account, there's no compounding and the two are equal.
Does compounding frequency change how much I earn?
Only if the interest is left in the deposit to compound. More frequent compounding (monthly vs annually) raises the effective yield a little. But many fixed-term products pay interest out at maturity or to a linked account, in which case the frequency doesn't change your total — you simply receive the simple interest on the principal.
Can I withdraw money before the term ends?
Usually not without a penalty. Most fixed-term deposits either forbid early withdrawal or forfeit a chunk of the interest, and some require notice. Because the money is locked away, keep a separate emergency fund in an easy-access account so you're not forced to break the deposit.
Should I choose a longer or shorter term?
It depends on the rate outlook and when you'll need the money. A longer term protects you if rates fall but locks you out of higher rates if they rise; a shorter term keeps you flexible. Some savers split their cash across several deposits maturing at staggered dates — a 'ladder' — to balance access and return.
Is the interest taxable?
Generally yes — interest is usually treated as taxable income, though the exact rules and any allowances depend on your country and whether the deposit sits inside a tax-sheltered account. The calculator shows the gross maturity value before any tax. Check your local rules or hold the deposit in a tax-advantaged wrapper where available.

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