CD Interest Calculator
CD Interest Calculator
Calculate interest earned on a certificate of deposit
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Formula
Maturity Value = Deposit × (1 + APY/100)^(months/12). Interest Earned = Maturity Value - Deposit.
Frequently Asked Questions
How is CD interest calculated?
CD interest is calculated using the APY (Annual Percentage Yield), which already accounts for compounding frequency. Maturity Value = Deposit × (1 + APY)^years. For a $10,000 CD at 5% APY for 1 year, you earn $500 in interest.
What is the difference between APY and APR for CDs?
APR is the simple annual interest rate without compounding. APY includes the effect of compounding and represents the actual annual return. For CDs, APY is the more useful figure because it shows your true earnings. A 4.9% APR compounded daily equals about 5.02% APY.
What happens if I withdraw a CD early?
Early withdrawal from a CD typically incurs a penalty, often 3-6 months of interest for shorter-term CDs and 6-12 months for longer terms. Some banks offer no-penalty CDs, but these usually have lower rates. Always check penalty terms before opening a CD.
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