CD Calculator
Calculate certificate of deposit maturity value and effective annual yield.
Inputs
CD interest is taxable as ordinary income. Enter your rate to see after-tax yield.
Maturity Value
$10,511.62
Interest Earned
$511.62
Annual Percentage Yield (APY)
5.1162%
The true annual yield accounting for compounding frequency.
Total Return for Term
5.1162%
Step by step
Initial deposit
= $10,000.00
Compounding: rate per period
5% ÷ 12
= 0.416667%
Total compounding periods
1 years × 12 periods/year
= 12
Maturity value
$10,000.00 × (1 + 0.004167)^12
= $10,511.62
Annual Percentage Yield (APY)
(1 + 0.004167)^12 − 1
= 5.1162%
How it works
A certificate of deposit locks in a fixed rate for a fixed term. The bank compounds interest at the frequency stated in the contract (often daily), producing an APY that's slightly higher than the stated APR. Because you can't add to the CD after opening, the maturity value is simply a single-lump-sum compound growth calculation. CD interest is taxable as ordinary income in the year it's received.
Formulas
CD maturity value
Maturity Value = Principal × (1 + r/n)^(n×t)
- P
- Principal (initial deposit)
- r
- Annual interest rate (decimal)
- n
- Compounding periods per year
- t
- Term in years
Annual Percentage Yield
APY = (1 + r/n)^n − 1
- r
- Annual interest rate (decimal)
- n
- Compounding periods per year
Frequently Asked Questions
What is the difference between APR and APY on a CD?
APR is the nominal rate the bank quotes. APY (Annual Percentage Yield) accounts for how often interest compounds within the year. If a CD offers 5% APR compounded daily, its APY is about 5.127%. Banks are required to disclose APY — it's the number you should use to compare offers.
What happens if I withdraw early?
Most CDs impose an early withdrawal penalty, typically 90–360 days of interest depending on the term. Penalties can reduce you below your starting principal on short-term CDs. Some 'no-penalty' CDs exist but generally offer lower rates.
Are CD earnings taxed?
Yes — CD interest is taxed as ordinary income in the year it is credited to your account (or at maturity for short-term CDs). Enter your marginal tax rate in this calculator to see your after-tax yield.
Is my CD insured?
CDs at FDIC-insured banks are covered up to $250,000 per depositor per institution. CDs at NCUA-insured credit unions have equivalent coverage. Always verify the institution is insured before depositing large amounts.