CD Calculator

How the Compound option changes what your interest rate actually earns

Every option in the Compound dropdown uses the same underlying idea, growing a deposit period by period, but a different number of periods per year, plus one special case for continuous compounding:

The "Annually (APY)" and "Monthly (APR)" labels on the two ends of that dropdown are describing the same rate field, not a different formula. Compounding once a year (n = 1) makes a nominal rate identical to its own effective annual yield, which is why banks quote a CD's APY directly on their rate sheet. Compounding monthly (n = 12) is the classic case where the stated rate is more accurately called an APR: dividing it by 12 and compounding it 12 times over a year produces a real effective yield a little higher than the stated number, since interest starts earning its own interest sooner.

Worked example. Take a $10,000 initial deposit at a 5% interest rate, compounded monthly for a 1-year term. The periodic rate is 5% ÷ 12, about 0.4167% a month, compounded over 12 periods, which works out to approximately $10,511.62, or $511.62 in interest:

Compare that with the same $10,000 at the same 5% rate compounded annually instead, which lands at exactly $10,500.00, or $500 in interest:

The gap, about $11.62, is entirely the effect of compounding monthly rather than annually at an identical stated rate, which is exactly the distinction the APY/APR labels are calling out.

This step-by-step growth from deposit to end balance, period by period, is what the Accumulation Schedule below the calculator shows directly, toggled between an annual and a monthly view, rather than jumping straight to the final number.

CD rate calculator: what 10,000 earns at common rates and terms

The table below works as a CD rate calculator for a quick comparison. It treats each rate as an APY, so it uses annual compounding, and shows the end balance on a 10,000 deposit. Used as a CD interest rate calculator or a CD return calculator, it shows what each extra half point is worth; enter your own bank's rate above for the exact figure.

To calculate CD interest for a whole-year term at a stated APY, multiply the deposit by one plus the APY once per year and subtract the deposit. The same maths makes the table a CD APY calculator and a CD yield calculator for whole years. A 3% CD held for one year grows the deposit by 3%, while a 5% CD held for five years grows it by about 28%, so term matters as much as rate.

The fields also handle terms that are not whole years. The same inputs act as a 3 month CD calculator, a 6 month CD calculator, a 12 month CD calculator or a 5 year CD calculator, depending on the deposit length you enter, and as an online CD calculator they need no signup. For a CD calculator compounded daily, choose continuously: on 10,000 at 5% for one year the two differ by about four cents. The monthly view of the schedule works as a CD monthly interest calculator, and the compounding options make it a CD compound interest calculator as well.

Deposit length: years and months

Real CD terms are not always a whole number of years, so the deposit length is split into two fields instead of one. An 18-month CD is entered as 1 year and 6 months, which the calculator combines into a single 1.5-year term and computes growth over that exact fractional length rather than rounding it away.

Worked example, continued. Take a $1,000 initial deposit at a 4% rate, compounded annually, over 1 year and 6 months. The exponent in 1000 × 1.04^1.5 is a fraction, 1.5 compounding periods, and growth over a fractional exponent will not equal a simple percentage multiplication. The result works out to approximately $1,060.60, a real, slightly larger figure than the (incorrect) shortcut of simply taking 1.5 times a single year's worth of interest.

Marginal tax rate: how much of the interest you actually keep

CD interest is taxed as ordinary income in the year it is earned or credited, so the calculator offers an optional Marginal Tax Rate field to show what is left after tax. It applies a flat percentage reduction to the interest earned only, never to the principal: after-tax interest is total interest × (1 − tax rate), and the after-tax balance simply adds that reduced interest back onto the initial deposit.

Use your marginal tax rate, the rate that applies to your last dollar of income (your tax bracket), rather than your average or effective tax rate across all your income, CD interest stacks on top of your other income for tax purposes, so it is taxed at the margin, not at some blended average rate. This is a deliberate simplification rather than a full tax-planning tool: it does not account for state taxes, tax-advantaged accounts (a CD held inside an IRA, for example, is not taxed the same way), or a tax bracket that changes mid-year; treat the after-tax figure as a reasonable estimate, not a substitute for a real tax return.

Getting accurate inputs into the CD calculator

This calculator is only as accurate as the numbers entered into it, and a handful of small mix-ups explain most of the "why doesn't this match my bank's number" questions. Match the Compound option to how your bank actually quotes and compounds its rate, a rate advertised as an APY should generally use "Annually (APY)", since APY already is the annual compounding case, while a nominal rate that compounds more often should use whichever of semiannually, quarterly, or "Monthly (APR)" matches your CD's actual schedule. Enter the deposit length as years and months rather than trying to force a fractional number into the years field alone, and enter the initial deposit as a plain number without a currency symbol or thousands separator, for example 10000 rather than $10,000.00.

CD term length itself is a separate decision worth thinking through alongside the math above. A longer term generally locks in the current rate for longer, which is valuable if rates are expected to fall but a drawback if they are expected to rise, since the money is committed either way, most CDs charge a real bank's own early withdrawal penalty if you take money out before the term ends, a cost this calculator does not model directly since it focuses on projecting growth and after-tax return. Some savers split a lump sum across CDs with staggered terms instead, a strategy commonly called laddering, so that only a portion matures, and becomes freely accessible again, at any given time. This calculator only projects a single CD at a time rather than acting as a dedicated cd ladder calculator, but running it once per rung of a ladder, with each CD's own deposit, rate, and length, gives the same insight for a laddered strategy. The same approach works as a simple cd rollover calculator too: as one CD approaches maturity, rerunning the tool with the new term's deposit, rate and length projects the next cycle just as easily. A jumbo CD works through this same math too, it simply requires a much larger minimum deposit, often $100,000 or more, in exchange for a somewhat higher rate, so anyone comparing standard and jumbo CD rates can use this as a jumbo CD calculator by entering the larger deposit and the jumbo rate on offer.

Comparing a CD against a regular compounding account without a fixed term, essentially a fixed rate savings calculator question minus the lock-in? The compound interest calculator uses the same underlying compounding idea without a maturity date or an early withdrawal penalty.