CD Calculator
A CD rate and interest calculator for certificates of deposit: enter a deposit amount, your bank's quoted APY or APR, and a term, to see the ending balance, total interest earned, and a year-by-year growth breakdown for multi-year terms.
APY includes the effect of compounding; APR does not — for the same stated rate, APY is always equal to or higher than APR.
Compounding frequency doesn't change the total when you enter an APY — it's already priced in.
Ending Balance
$10,450
Total Interest Earned
$450
Year-by-Year Growth
| Year | Balance | Cumulative Interest |
|---|---|---|
| Year 1 | $10,450 | $450 |
How CD Interest Is Calculated
A certificate of deposit pays interest on a lump-sum deposit for a fixed term, using standard compound interest: ending balance = P × (1 + r/n)^(n×t), where P is the deposit, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the term in years.
APY vs. APR: APR (annual percentage rate) is the stated interest rate before compounding is applied. APY (annual percentage yield) already includes the effect of compounding, so it's always equal to or higher than the APR for the same account. Banks are required to advertise APY, so most CD rate quotes are already APY — that's why the calculator above defaults to APY mode, where the compounding-frequency selector has no effect on the result (it's already baked into the number).
Worked Example
A $10,000 deposit into a 1-year CD at 4.5% APY: total interest = 10,000 × ((1.045)^1 − 1) = $450, for an ending balance of $10,450. If the same account had instead quoted a 4.5% APR compounded monthly, the ending balance would be slightly higher — $10,459.40 — because monthly compounding on an APR produces a marginally higher effective yield (4.594% APY-equivalent) than a flat 4.5% APY does.
How Compounding Frequency Affects Returns
For a given APR, more frequent compounding produces a slightly higher effective yield — but the difference is small, not dramatic. Here's a $10,000 deposit at 4.5% APR for one year, at each compounding frequency:
| Compounding | Effective APY | Ending Balance |
|---|---|---|
| Daily | 4.60% | $10,460.25 |
| Monthly | 4.59% | $10,459.40 |
| Quarterly | 4.58% | $10,457.65 |
| Annually | 4.50% | $10,450 |
The gap between annual and daily compounding on a 4.5% APR is under $2 on a $10,000 deposit over one year. Compounding frequency matters far less than the headline rate itself — a 0.25-point higher APY almost always beats a more frequent compounding schedule on a lower rate.
Early Withdrawal Penalties
Withdrawing from a CD before its term ends commonly triggers a penalty, most often expressed as a number of months of interest — for example, "3 months of interest" for terms under a year, or "6 months" for longer terms is a commonly cited structure. The penalty is typically calculated against the account's rate and deposited principal, and applies whether or not that much interest has actually accrued yet at the time of withdrawal. Exact terms vary by bank and by CD product, so the account disclosure is the source of truth — the estimator above is a starting point for what a penalty might look like, not a substitute for it.
CD Laddering
A CD ladder splits a total deposit across several CDs with staggered maturity dates instead of one lump sum in a single term — for example, dividing a deposit evenly across 1-year, 2-year, 3-year, 4-year, and 5-year CDs. As each shorter-term CD matures, the proceeds get reinvested into a new long-term CD at whatever rate is available then. The result is a portion of the total deposit becoming accessible every year, without giving up the typically higher rates that longer terms pay, and without betting the whole deposit on today's rate for the full term.