CD Calculator
Calculate how much interest you will earn on a certificate of deposit (CD) based on the initial deposit, interest rate, compounding frequency, and term length.
Results
| Final Balance | $0.00 |
|---|---|
| Total Interest Earned | $0.00 |
| After-Tax Balance | $0.00 |
| After-Tax Interest | $0.00 |
| Effective Annual Rate (APY) | 0.00% |
| Year | Interest | Balance |
|---|
| Month | Interest | Balance |
|---|
About CD Calculator
A Certificate of Deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time (such as 6 months, 1 year, or 5 years), and in exchange, the issuing bank pays interest. When you cash in or redeem your CD, you receive the money you originally invested plus any accrued interest.
How CD Interest is Calculated
The formula for calculating CD interest is:
A = P × (1 + r/n)nt
Where:
- A = the future value of the investment
- P = the principal investment amount (the initial deposit)
- r = the annual interest rate (decimal)
- n = the number of times that interest is compounded per year
- t = the number of years the money is invested
APY vs. APR
APY (Annual Percentage Yield) takes into account the effect of compounding interest, whereas APR (Annual Percentage Rate) does not. For CDs, APY is the more accurate measure of what you'll earn because it accounts for how often interest is compounded.
Tax Considerations
Interest earned on CDs is taxable as ordinary income in the year it is earned. This calculator allows you to account for your marginal tax rate to see your after-tax returns.