CD Calculator

A certificate of deposit, or CD, is a savings product offered by banks and credit unions that pays a fixed interest rate in return for keeping your money deposited for a fixed term — typically anywhere from three months to five years. In exchange for agreeing not to touch the funds, you usually earn a higher rate than a standard savings account, and the return is guaranteed and federally insured, making CDs one of the safest places to grow money.

The key figure on a CD is the annual percentage yield (APY), which already accounts for compounding and represents your true annual return. Interest may compound daily, monthly or quarterly, and more frequent compounding slightly increases your earnings. Because the rate is locked at the start, you know your exact maturity value the moment you open the CD — a level of certainty that variable-rate savings accounts can't offer.

The main trade-off is liquidity. Your money is committed for the term, and withdrawing early typically triggers an early-withdrawal penalty, often several months of interest. This makes CDs best suited for money you won't need until a known date — saving for a down payment in two years, for instance, or parking funds you want to keep safe and growing without market risk.

A popular strategy to balance return and access is a CD ladder: instead of putting all your money in one long CD, you split it across several with staggered maturities — say one, two, three, four and five years. As each shorter CD matures, you reinvest it into a new long-term CD. This gives you regular access to a portion of your money while capturing the higher rates that longer terms usually offer, and it reduces the risk of locking everything in just before rates rise.

CDs won't make you rich, and over long periods their returns may trail inflation and the stock market. But for safety, predictability and a guaranteed return on money you can't afford to risk, they're a valuable tool. This calculator shows precisely what a given deposit, rate and term will yield so you can compare offers and plan with confidence.