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CD Calculator (Certificate of Deposit)

Calculate interest earned, ending balance, and annual percentage yield (APY) on Certificate of Deposit accounts.

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How to Use the CD Calculator

1Enter your initial deposit principal (e.g. $10,000).
2Enter the annual interest rate or Annual Percentage Yield (APY).
3Select the CD term length (in months or years).
4Select your compounding frequency (daily, monthly, quarterly, or annually) and view the total interest earned.

Formula & How It Works

Compound Interest Formula

A = P(1 + r/n)^(nt) | Interest Earned = A - P

Certificate of deposit interest compounds over time. The future value (A) depends on the principal (P), annual interest rate (r), compounding frequency per year (n), and term in years (t).

Worked Examples

1-Year CD at 5.0% APY

Input: $10,000 deposit, 5.0% APY, 12 months, compounded monthly

Explanation: $10,000 × (1 + 0.05/12)^12 = $10,511.62.

Result: Ending Balance: $10,511.62 | Interest Earned: $511.62

3-Year CD Growth

Input: $25,000 deposit, 4.5% interest, 36 months, compounded daily

Explanation: Daily compounding maximizes yield over the 3-year term.

Result: Ending Balance: $28,614.77 | Total Interest: $3,614.77

Frequently Asked Questions

What is the difference between interest rate and APY?▼

The interest rate is the base percentage earned on principal, whereas APY (Annual Percentage Yield) reflects the true return including the effect of compound interest over a full year.

What happens if I withdraw money from a CD early?▼

Most banks assess an early withdrawal penalty, usually equal to 3 to 6 months of earned interest depending on the certificate term.

Is CD interest subject to income tax?▼

Yes, earned CD interest is taxable as ordinary income in the year it is credited to your account, even if you do not withdraw the funds.

Is this calculation financial advice?▼

For information only, not financial advice. Consult a certified financial planner for individual investment advice.

Last reviewed & updated: 2026-03-29

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