CD Calculator
Estimate the interest earned on a certificate of deposit (CD) from its APY and term.
About the CD Calculator
Enter the deposit, the APY the bank quotes and the term in months. The calculator shows the value at maturity and the interest earned.
US banks quote CDs by APY (annual percentage yield), which already includes compounding, so the value is simply the deposit times (1 + APY) raised to the term in years. That's why you don't need to choose a compounding frequency.
The formula
Value = P × (1 + APY)^(months ÷ 12)
- P
- amount deposited
- APY
- annual percentage yield as a decimal (4.25% = 0.0425)
Worked example
$10,000 in a 12-month CD at 4.25% APY
- 10,000 × 1.0425 = $10,425.00, so $425 of interest
- An 18-month CD at the same APY: 10,000 × 1.0425^1.5 = $10,644.23
Things to keep in mind
- Before tax: CD interest is ordinary income.
- Withdrawing early usually costs several months of interest, often 3 to 12 months depending on the term.
Questions people ask
What's a CD ladder?
Splitting money across CDs with staggered terms so some matures every year.
Is CD interest taxable?
Yes, as ordinary income in the year it's credited.
APY or APR?
APY includes compounding; APR doesn't. For savings and CDs compare APYs.