CD Calculator
Certificate of Deposit interest calculator
Enter your deposit amount and CD details to see your earnings.
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Find the best CD rates available now
Online banks · FDIC-insured CDs · Compare current APYs
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How CDs Work
CD interest is deposit × ((1 + APY)years − 1). A $10,000 12-month CD at an example 4.00% APY earns $400; over 5 years at the same APY it earns $2,167. Enter your deposit, APY and term above to see the maturity value, the maturity date and what an early withdrawal would cost.
A Certificate of Deposit (CD) is a time deposit that pays a guaranteed, fixed interest rate in exchange for leaving your money untouched for a specified term. CDs are FDIC-insured up to $250,000 per bank, making them one of the safest investments available.
CD rates vary widely: the FDIC national average for a 12-month CD was 1.71% APY in August 2026, and competitive online banks pay well above that. Longer terms do not always pay more, because the yield curve can be flat or inverted, meaning short CDs sometimes beat long ones. Always compare current rates before committing.
CD Ladder Strategy
A CD ladder splits your deposit across multiple CD terms (e.g., 1/3 each in 1, 2, 3 year CDs). As each matures, reinvest in the longest term. This provides regular access to funds while capturing higher long-term rates. If rates rise, you benefit as shorter CDs mature and can be reinvested at better rates.
APY vs APR
APY (Annual Percentage Yield) accounts for compounding. APR (Annual Percentage Rate) does not. For a CD with 4.75% nominal rate compounding daily: APY = (1 + 0.0475/365)^365 - 1 = 4.864%. Banks are required to advertise APY for savings products: it's the true annualized return.
Early Withdrawal Penalty
Most CDs charge a penalty for early withdrawal, typically expressed in months of interest. A common schedule, and the one this calculator uses: terms under 12 months, 3 months of interest; 12 to 36 months, 6 months; longer terms, 12 months. Some 'no-penalty CDs' allow early withdrawal with no fee but pay lower rates. Banks may reduce principal if withdrawal happens very early.
CD vs HYSA
CDs: guaranteed rate for the full term, early withdrawal penalty, slightly higher rates than HYSAs. High-yield savings: flexible withdrawals, rates change with the Fed funds rate, no penalty. When rates are expected to fall, locking in a CD makes sense. When rates are expected to rise, HYSAs let you capture higher rates as they increase.
CD Earnings by Term and APY
Interest earned on a $10,000 deposit held to maturity. The APYs are examples, not current offers.
| APY | 6 months | 12 months | 24 months | 36 months | 60 months |
|---|---|---|---|---|---|
| 2.00% | $100 | $200 | $404 | $612 | $1,041 |
| 3.00% | $149 | $300 | $609 | $927 | $1,593 |
| 4.00% | $198 | $400 | $816 | $1,249 | $2,167 |
| 5.00% | $247 | $500 | $1,025 | $1,576 | $2,763 |
Because APY already includes compounding, the formula works the same whether the bank compounds daily or monthly. A longer term only pays more if its APY is at least as high; when short CDs pay more, a string of short ones can beat one long one.
What an Early Withdrawal Really Costs
$10,000 at an example 4.00% APY, using the common penalty schedule this calculator applies. Your own CD agreement sets the actual penalty.
| Term | Typical penalty | Penalty in dollars | Interest if held to maturity |
|---|---|---|---|
| 3 months | 3 months of interest | $100 | $99 |
| 6 months | 3 months of interest | $100 | $198 |
| 12 months | 6 months of interest | $200 | $400 |
| 24 months | 6 months of interest | $200 | $816 |
| 36 months | 6 months of interest | $200 | $1,249 |
| 60 months | 12 months of interest | $400 | $2,167 |
The penalty is a fixed amount, not a share of what you have earned. Break a 12-month CD after 4 months and you have earned about $132, but the penalty is $200, so $68 comes out of your deposit. The later in the term you withdraw, the smaller the bite.
How a CD Ladder Rolls Over
Split $25,000 into five $5,000 CDs with terms of 1, 2, 3, 4 and 5 years. Each time one matures, reinvest it in a new 5-year CD.
| End of year | CD that matures | What you do |
|---|---|---|
| 1 | 1-year CD | Reinvest in a 5-year CD |
| 2 | 2-year CD | Reinvest in a 5-year CD |
| 3 | 3-year CD | Reinvest in a 5-year CD |
| 4 | 4-year CD | Reinvest in a 5-year CD |
| 5 and later | One 5-year CD every year | Spend it or roll it again |
From year 5 every rung earns the 5-year rate, yet one fifth of the money comes free each year without a penalty. If rates rise you reinvest at the higher rate sooner; if they fall, most of the ladder is still locked in.
Rates, Insurance and Tax in 2026
- Rate environment: the Federal Reserve raised its target range to 3.75% to 4.00% in September 2026. A CD's rate is fixed for the term, so later moves only affect new CDs and renewals.
- National averages: the FDIC's August 2026 averages were 1.71% APY for a 12-month CD and 1.36% for a 60-month CD. Online banks and credit unions usually pay well above the average, so compare several before you open one.
- Insurance: FDIC (banks) and NCUA (credit unions) insure deposits up to $250,000 per depositor, per institution, per ownership category.
- Tax: interest is ordinary income in the year it is credited or earned, even on a multi-year CD you have not cashed. Early withdrawal penalties are deductible as an adjustment to income.
Method and sources. Maturity value = deposit × (1 + APY)months/12. Penalty = deposit × APY ÷ 12 × penalty months (3 under 12 months, 6 for 12 to 36 months, 12 above). All tables were computed with these formulas; APYs are examples. Rate environment: Federal Reserve FOMC statement, September 2026, and FDIC National Rates and Rate Caps, August 2026. Insurance: FDIC and NCUA deposit insurance rules. Tax: IRS Publication 550 and Form 1099-INT instructions.
CD rates and terms vary by institution. Early withdrawal penalties are estimates based on common industry practices: your specific CD agreement governs actual penalties.
Frequently Asked Questions
A CD is a savings product offered by banks and credit unions. You deposit money for a fixed term (3 months to 5 years), and the bank pays a guaranteed interest rate. At maturity, you get your deposit back plus interest. CDs are FDIC-insured up to $250,000 per bank. They're safer than stocks but less liquid. The trade-off: your money is locked up for the term (with penalties for early withdrawal).
Rates change often, so this page does not list bank offers. For reference, the FDIC national averages in August 2026 were 1.71% APY for 12 months and 1.36% for 60 months, and the Federal Reserve raised its target range to 3.75% to 4.00% in September 2026. Online banks usually pay well above the averages. Credit unions also offer competitive rates. Always compare current rates as they change with the Fed.
Maturity value = Deposit × (1 + APY)^(term in years). Example: $10,000 at 4.75% APY for 12 months = $10,000 × 1.0475^1 = $10,475. Interest earned = $475. For 6 months: $10,000 × 1.0475^0.5 = $10,235. Note: banks advertise APY (which already accounts for compounding frequency) so you can use this simple formula regardless of compound frequency.
When a CD matures, you typically have a grace period (7 to 10 days) to withdraw funds or change terms without penalty. If you do nothing, the bank usually auto-renews the CD for the same term at the current rate (which may be lower). Always mark your maturity date on your calendar. Review current rates before auto-renewal: sometimes you can do better elsewhere.
With the Fed's target range at 3.75% to 4.00% in September 2026, competitive CDs pay a guaranteed, insured return that no stock can promise. For money you don't need for 6 to 12 months, CDs make sense. Not worth it: money you need immediate access to (keep in HYSA), or money you can invest long-term (stocks historically return 7 to 10% annually, beating CDs over long periods despite short-term risk).
If you withdraw before maturity, you forfeit a portion of earned interest (rarely touches principal unless withdrawal is very early). Typical penalties: 3-month CD: 90 days interest. 6-month CD: 90 days interest. 1-year CD: 180 days interest. 2-year CD: 180 days interest. 5-year CD: 365 days interest. Example: $10,000 at 5% for 12 months, withdrawing after 4 months. Interest earned = $167. Penalty = 180 days × (5%/365) × $10,000 = $247: you'd lose money vs. holding to 6 months.
No-penalty CDs allow early withdrawal without forfeiting interest, usually after a waiting period (6 to 7 days from opening). They typically pay 0.25 to 0.75% less than traditional CDs. Best for: money you might need before maturity but want to earn more than an HYSA. The trade-off: slightly lower rate for more flexibility. Ally, Marcus, and CIT Bank offer competitive no-penalty CDs.
CD interest is taxed as ordinary income in the year it's credited, whether or not you withdraw it. The bank sends a 1099-INT. For a 2-year CD, you'll pay taxes on interest earned each year, not just at maturity. Strategy: if you're in a high bracket now and expect to be in a lower bracket later, favor CDs that mature in lower-income years. Holding CDs in a Roth IRA eliminates all taxes on earnings.
Brokered CDs are sold by brokerages (Fidelity, Schwab, Vanguard) rather than directly by banks. Advantages: buy CDs from multiple banks in one place, often higher rates, can sell on the secondary market before maturity (unlike bank CDs). Risks: secondary market prices fluctuate with interest rates, creating potential losses if sold early. Brokered CDs are still FDIC-insured (up to $250,000 per issuing bank).
Generally no. Emergency funds need instant liquidity. CDs have withdrawal penalties. Better options: High-yield savings account (HYSA) with immediate access. Money market account with check-writing. Exception: no-penalty CD for the bulk of your emergency fund, with 1 to 2 months expenses in a regular savings/checking account for immediate needs. The key principle: don't lock up money you might need urgently.
Multiply by the APY: $10,000 at a 4.00% APY earns $400 in 12 months, at 3.00% it earns $300, and at the FDIC national average for a 12-month CD in August 2026 (1.71%) it earns $171. The APY already includes compounding, so no further adjustment is needed. The interest is taxable in the year it is paid.
Only if it is split across ownership categories or institutions. FDIC and NCUA insurance covers $250,000 per depositor, per insured institution, per ownership category. A single account and a joint account are different categories, so a married couple can insure $250,000 each in single accounts plus $500,000 in a joint account at one bank. Brokered CDs are insured per issuing bank.