CD Calculator – NerdWallet

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NerdWallet’s CD calculator shows what you can earn with a certificate of deposit, a type of savings account that you leave untouched for months or years. Like regular savings accounts, CDs are safe because they are federally insured. Here’s what to know about CDs and using the CD calculator.

What should I know when choosing CDs?

  • Prioritize finding a high interest rate. Not every bank has competitive rates on its CDs. See our list of the best CD rates.

  • Avoid early withdrawal fees. Although short-term CDs require less time to wait to access your money and therefore less need to incur the penalty to get money early, long-term certificates have more time to earn interest. (Breaking a CD early for a better rate can sometimes make sense, though.)

  • Longer terms don’t always mean higher rates. The 2023 rate environment has seen higher rates on the best one-year CDs compared to three- or five-year CDs.

How to use this CD calculator

The calculator has sample numbers to provide a starting point, but feel free to use your own numbers.

  1. Enter the deposit amount, or the fixed amount of money you’re comfortable leaving in a CD untouched for the whole term.

  2. Enter the CD term length, and select years or months. Use whole numbers only. For example, choose 18 months instead of 1.5 years.

  3. Enter the APY. Plug in current CD rates at various online banks as well as your bank’s CD rates to compare different options.

🤓Nerdy Tip

Many CD terms tend to be measured in years, but sometimes CDs are described in months. Here’s a quick reference for some terms: 12 months = 1 year; 18 months = 1.5 years; 30 months = 2.5 years; 48 months = 4 years; 60 months = 5 years; 84 months = 7 years; 120 months = 10 years.

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How to read your CD calculator results

Total amount: The sum you receive when you withdraw after a CD’s maturity date. The total amount includes the initial deposit and all compound interest.

Total interest earned: The sum the bank pays you based on a CD’s rate, term and initial deposit.

3 calculator assumptions

This CD calculator uses the following assumptions:

  • You have CDs at a bank and share certificates at a credit union. What isn’t covered are brokered CDs, meaning CDs offered by a brokerage firm, which don’t compound interest.

  • You choose to have interest grow in your CD. Many banks offer two options to receive CD interest: Keep it in the CD for the term, which is most common, or receive interest as regular payments to a separate account. The second option can provide a stable source of fixed income at a regular frequency, such as monthly or quarterly. But taking regular interest payments out of a CD means that interest doesn’t compound since your ongoing CD balance doesn’t increase.

  • You don’t withdraw from a CD early. Keeping your money in a CD until the maturity date ensures you earn the full amount of interest. An early withdrawal usually means paying a penalty and forfeiting the remaining interest you would’ve received.

Compare top CD rates

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Marcus by Goldman Sachs High-Yield CD

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Barclays Online CD

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Discover Bank logo

Discover Bank CD

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Glossary of CD terms

Deposit amount: The upfront sum you’re putting into a single CD. You can usually only add money to a CD once.

CD term length: The total time frame that a CD is open for. Some of the most common terms are three months, six months, one year, 18 months, three years and five years. Learn about choosing between short-term and long-term CDs.

🤓Nerdy Tip

Flipping the traditional trend, rates on one-year CDs lately have been higher than on five-year CDs.

APY: Annual percentage yield is a percentage that reflects the amount of money a bank pays you, or the interest, in a bank account in one year. It includes compound interest, which is the interest earned on both an account balance and previous interest. Put more simply, APY is the annual rate of return that factors in compounding. Learn about how APY works, or if you want a deeper dive, see our explainer on APY vs. interest rate.

CD interest: Money your bank pays you on the balance of a CD, usually expressed as an annual percentage yield. Learn more about how interest works.

Compounding frequency: The number of times your bank pays interest, such as daily, monthly or annually. Learn more about compound interest.

Frequently asked questions

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What happens if you withdraw a CD early?

Generally a CD has an early withdrawal penalty, which can range from a few months’ to a year’s worth of earned interest, depending on the bank and the CD term length. Longer term lengths usually have bigger penalties. These penalties occur only if you take out money before a CD term expires. Try our calculator to see what an early withdrawal penalty costs. If you want the flexibility of withdrawing early without a penalty, consider a no-penalty CD.

What term length should you get?

Historically, the longer the term, the higher the rate tends to be. But the 2023 rate environment has seen the highest rates on shorter terms. Just remember that even if a short-term CD has a higher rate, it has less time to earn interest than a long-term CD does.

Standard terms range from three months to five years. Most have early withdrawal penalties, so be sure you won’t need the money before the term expires.

How much interest will you earn on a CD?

The amount of interest earned on a CD varies based on your deposit, CD rate and term length. For example, a $10,000 deposit in a five-year CD with 4.50% APY would earn around $2,460 in interest. The same CD with a 1.50% APY would earn around $770 in interest, and the same CD with a 0.01% APY would earn only $5 in interest.

How to calculate CD interest

If you’d prefer to try your hand at calculating interest without a calculator, use the compound interest formula:

A = P(1 + r/n)^nt, where:

  • A = ending amount (this means original balance plus all interest earned after n years).

  • P = original balance (or your initial deposit, since there are typically no other contributions to CDs).

  • r = interest rate (as a decimal)*.

  • n = number of times interest is compounded per year (typically 365 for daily, 12 for monthly, 4 for quarterly).

Once you get a result for A, subtract P from A (A – P) to get the interest amount.

*Note: Interest rate and APY are slightly different. To be more exact, use the interest rate in the formula.

How do CD rates work?

CD rates are usually quoted as an annual percentage yield, or APY, which is how much the account earns in one year, including compound interest. Banks and credit unions generally compound interest monthly or daily. An interest rate is similar to APY, but it doesn’t factor in compound interest. For more details, see our explainer on APY.

When will CD rates go up?

Starting in March 2022, the Federal Reserve raised its rate multiple times, and CD rates have been on the rise. Federal Reserve actions are one factor in banks’ decisions to change rates. See historical CD rates. Or for a more timely outlook, see where current CD rates are headed.

See CD rates by term and type

Compare the best rates for various CD terms and types:

How do CDs work?

Learn more about choosing CDs, understanding CD rates, and opening and closing CDs.

For understanding CD rates:

See CD rates by bank

Here’s a quick list of CD rates at traditional and online banks and a brokerage:

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