CD vs. savings account
- CD balance fixed rate
- $10,939.90
- Savings balance rate can change
- $10,831.43
A savings rate can change at any time. A CD locks in your rate for the full term. The savings balance assumes monthly compounding.
CD Calculator
Enter your deposit, interest rate, compounding frequency, and term to estimate your end balance, interest earned, and effective APY.
End balance
$10,939.90
Deposited $10,000Earned $940
- Total interest
- $939.90
- After-tax interest
- $939.90
- Effective APY
- 4.59%
- Term
- 2 yr
9% interest
- Principal
- $10,000
- Interest
- $940
Balance growth
Accumulation schedule
| Period | Deposit | Interest | Balance |
|---|---|---|---|
| Year 1 | $10,000.00 | $459.40 | $10,459.40 |
| Year 2 | $0.00 | $480.50 | $10,939.90 |
Compare and adjust your results
See how your CD stacks up against a savings account, what your balance is worth after inflation, and what an early withdrawal could cost.
Inflation-adjusted return
- Nominal end balance
- $10,939.90
- Real value in today's dollars
- $10,311.91
Real value shows what your balance can buy in today's purchasing power.
Early withdrawal penalty
Estimate if you withdraw before the CD matures.
- Estimated penalty
- $225.00
Uses 3 months of interest for terms of 12 months or less, and 6 months for longer terms. Your bank's penalty may differ.
How the CD calculator works
A certificate of deposit (CD) pays a fixed interest rate if you leave your money with the bank for a set term. Interest compounds, which means each payment of interest is added to your balance and earns interest itself. This calculator uses the standard compound interest formula to estimate your balance at maturity.
Formula
A = P × (1 + r / n)n × t
- A is the amount at maturity.
- P is your initial deposit.
- r is the annual interest rate as a decimal.
- n is how many times per year interest compounds.
- t is the term in years.
Example: $10,000 at 5.00% for one year
The more often interest compounds, the more you earn. The difference is small but real.
| Compounding | Maturity value | Effective APY |
|---|---|---|
| Annually | $10,500.00 | 5.00% |
| Semi-annually | $10,506.25 | 5.06% |
| Quarterly | $10,509.45 | 5.09% |
| Monthly | $10,511.62 | 5.12% |
| Daily | $10,512.67 | 5.13% |
Getting an accurate estimate
- Enter the interest rate, not the APY. If you only have the APY, use the converter in the form.
- Choose the compounding frequency your bank uses.
- Remember that CD interest is generally taxable. Turn on the tax option to see an estimate.
- Check the early withdrawal penalty before you open the account.
Results are estimates for educational purposes. Banks may count days differently, so your actual balance can differ by a few cents. The calculator does not include account fees.
Frequently asked questions
How is CD interest calculated?
CD interest compounds, so each period of interest is added to the balance before the next period is calculated. The maturity value is A = P(1 + r/n)^(nt), where P is the deposit, r is the annual interest rate, n is the number of compounding periods per year, and t is the term in years.
What is the difference between the interest rate and the APY?
The interest rate is the yearly rate before compounding. The APY (annual percentage yield) includes the effect of compounding, so it is slightly higher whenever interest compounds more than once a year. This calculator expects the interest rate. If you only have the APY, use the rate and APY converter to find the matching interest rate.
Is CD interest taxable?
In general, yes. CD interest is usually taxed as ordinary income in the year it is earned, even if the CD has not matured. Banks typically report interest of $10 or more on Form 1099-INT. Turn on the tax option to estimate your after-tax interest, and check with a tax professional for your own situation.
What happens if I withdraw money from a CD early?
Most CDs charge an early withdrawal penalty, often a set number of months of interest. The penalty shown here is an estimate that uses 3 months of interest for terms of 12 months or less and 6 months for longer terms. Your bank sets its own penalty, so check the account terms.
Are CDs insured?
CDs at FDIC-insured banks and NCUA-insured credit unions are generally insured up to $250,000 per depositor, per institution, per ownership category.