See your certificate of deposit's value at maturity, the interest it earns, and its true APY after compounding — plus what an early withdrawal would cost.
This is an estimate assuming the rate is fixed and interest stays in the CD until maturity. Actual terms, compounding methods, and early-withdrawal penalties vary by bank, and interest earned is generally taxable. CDs at FDIC-insured banks are covered up to applicable limits. This tool is for educational purposes only and is not financial advice.
A certificate of deposit pays a fixed interest rate in exchange for leaving your money untouched for a set term. Interest compounds — meaning you earn interest on your interest — and most banks compound daily or monthly, then credit it to the CD. Because the rate is locked, you know the exact value at maturity the day you open it.
The longer the term and the higher the rate, the more you earn. The trade-off is access: your money is committed for the term, and taking it out early usually triggers a penalty.
The APR is the simple annual rate. The APY (annual percentage yield) folds in compounding, so it's always slightly higher than the APR and reflects what you truly earn in a year. A 4.5% APR compounded monthly works out to about a 4.59% APY.
Banks are required to advertise the APY, so when you compare CDs, compare APYs rather than rates — that's the apples-to-apples figure regardless of how often each bank compounds.
If you take money out before the term ends, banks charge a penalty that's typically expressed as a number of months of interest — often around 3 months for short CDs and 6 to 12 months for longer ones. On a 24-month CD, a 6-month penalty can erase a meaningful chunk of your earnings.
The calculator estimates this penalty so you can weigh whether a longer term is worth the reduced flexibility. If you might need the cash, a shorter term or a no-penalty CD may be a better fit.
A CD ladder splits your money across several CDs with staggered maturities — for example five equal CDs maturing one year apart. As each one matures you can spend it or roll it into a new long-term CD. This way part of your money becomes available every year while most of it still earns the higher long-term rates.
Laddering is a simple way to avoid locking everything in at one rate and one date, which is especially useful when you're unsure where rates are heading.
A high-yield savings account keeps your money fully accessible with a variable rate that can rise or fall. A CD locks in a fixed rate but ties up the money. Bonds can offer higher long-term returns but carry price risk if you sell before maturity.
CDs fit money you won't need for a defined period and want to protect with a guaranteed return. For an emergency fund you might touch at any time, a high-yield savings account is usually the better home.
Your deposit earns a fixed rate that compounds at a set frequency, so interest is added to the balance and then earns interest itself. The maturity value is your deposit grown by the APY over the term.
APR is the simple annual rate; APY includes the effect of compounding and is slightly higher. APY is what you actually earn in a year, so compare CDs by APY.
You typically pay an early-withdrawal penalty equal to several months of interest, which reduces or can exceed what you earned. The exact penalty varies by bank and term.
Generally yes. Interest is usually taxed as ordinary income in the year it's credited, even if you don't withdraw it. Your bank reports it on a 1099-INT.
CDs at FDIC-insured banks (or NCUA-insured credit unions) are protected up to the applicable limits, making them one of the lower-risk places to hold money for a fixed term.