How this calculator works
A CD's APY already includes compounding, so the value at maturity is the deposit × (1 + APY) raised to the term in years. The table runs the same APY across terms from 3 months to 5 years so you can compare.
Worked example
With the example values below: Value at maturity, $10,400.00 ($400.00 earned). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Deposit | $10,000 |
| APY | 4% |
| Term | 1 year |
How CDs work
A certificate of deposit is a savings account with a fixed term and a fixed rate. You deposit a lump sum, the bank guarantees an APY for the term (commonly 3 months to 5 years), and at maturity you get your deposit back plus the interest. In exchange for the guaranteed rate, you agree not to withdraw early.
Because the rate is locked, a CD protects you if rates fall. If rates rise during the term, you're stuck with the lower rate until maturity, which is the main trade-off against a high-yield savings account.
Choosing a CD term
Longer terms don't always pay more. When the market expects rates to fall, banks sometimes pay higher APYs on 6- to 12-month CDs than on 5-year CDs. Compare the table in the calculator against actual offers, and match the term to when you'll need the money.
A CD ladder spreads your money across several terms, for example 1, 2, 3, 4 and 5 years. Each year one CD matures and you reinvest it at the 5-year rate, so you get regular access to part of your money while most of it earns longer-term rates.
Types of CDs
Each type trades some yield for flexibility, so pick based on how likely you are to need the money early.
- Traditional CD: fixed rate and term, with a penalty for early withdrawal.
- No-penalty CD: you can withdraw after the first week without a penalty, usually at a lower APY.
- Bump-up CD: lets you raise your rate once if the bank's rates go up.
- Jumbo CD: requires a large deposit, often $100,000, sometimes for a slightly higher rate.
- Brokered CD: bought through a brokerage; can be sold before maturity on the secondary market instead of paying a penalty, though the price may be below what you paid.
CDs compared with other safe options
CDs are FDIC-insured up to $250,000 per depositor, per bank, per ownership category. Treasury bills are backed by the US government and their interest is exempt from state and local tax, which can make them the better after-tax choice in high-tax states. A high-yield savings account gives you full access to your money but its rate can change at any time.
Frequently asked questions
How do you calculate interest on a CD?
Multiply the deposit by (1 + APY) raised to the term in years, then subtract the deposit. $10,000 at 4% APY earns $400 in one year; over two years it grows to $10,816, or $816 in interest.
Do you pay taxes on CD interest?
Yes. CD interest is taxed as ordinary income in the year it's credited to your account, even if you don't withdraw it until the CD matures. Your bank reports it on Form 1099-INT. CDs held inside an IRA are taxed under the IRA's rules instead.
What happens if I withdraw from a CD early?
Most banks charge an early withdrawal penalty, usually a set number of months of interest, such as three months on a 1-year CD. The penalty can eat into your principal if you withdraw soon after opening. No-penalty CDs avoid this but usually pay a lower APY.
Is a CD a good investment right now?
A CD makes sense for money you won't need until a known date and want to protect from market swings. If you think rates will fall, locking in a longer term secures today's yield. If you may need the money early, a high-yield savings account or no-penalty CD keeps it accessible.
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. Your principal and the stated interest are guaranteed as long as you stay within those limits.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.