Certificate of Deposit earnings with APY, compounding and early-withdrawal math
| Year | Start Balance | Interest | End Balance |
|---|
APY already includes compounding, so maturity value = deposit × (1 + APY)^years regardless of how often the bank compounds internally. Interest is taxable as ordinary income in the year it's credited.
A Certificate of Deposit is the simplest deal in banking: you agree not to touch your money for a fixed term, and the bank pays you a fixed, guaranteed yield for the privilege. This calculator turns any CD offer — deposit, APY, term — into the number you actually care about: what you'll have at maturity.
Banks advertise CDs by APY (Annual Percentage Yield), which by regulation already includes the effect of compounding. That makes the maturity math clean:
Whether the bank compounds daily or monthly is baked into the APY — two CDs with the same APY pay the same at maturity, full stop. (The interest rate, a slightly lower number, is the pre-compounding figure; always compare offers by APY.)
$10,000 in a 12-month CD at 4.50% APY matures at $10,450 — $450 of guaranteed, FDIC-insured interest. The same deposit in a 3-year CD at the same APY grows to $11,411.66, because each year's interest itself earns interest in years two and three.
| Term | At 3.5% APY | At 4.5% APY | At 5.0% APY |
|---|---|---|---|
| 6 months | $173 | $222 | $247 |
| 12 months | $350 | $450 | $500 |
| 2 years | $712 | $920 | $1,025 |
| 3 years | $1,087 | $1,412 | $1,576 |
| 5 years | $1,877 | $2,462 | $2,763 |
Breaking a CD before maturity triggers a penalty, almost always expressed as months of interest:
| CD term | Typical penalty | On $10,000 at 4.5% APY |
|---|---|---|
| Under 12 months | 3 months of interest | ~$110 |
| 1–3 years | 6 months of interest | ~$220 |
| 4–5 years | 12 months of interest | ~$440 |
The penalty comes out of interest first, but if you withdraw very early it can eat into principal. If there's a real chance you'll need the money, a shorter term or a no-penalty CD (slightly lower APY) usually beats paying the penalty.
A ladder splits your deposit across staggered maturities — e.g., $2,500 each into 1-, 2-, 3- and 4-year CDs. Every year a rung matures: spend it if you need it, or roll it into a new long CD at the top of the ladder. You capture most of the long-term yield while never being more than a year from access to a quarter of the money. Model each rung in this calculator to price your ladder precisely.
APY includes compounding; the interest rate doesn't. A 4.40% rate compounded daily is roughly a 4.50% APY. Banks must disclose APY precisely so you can compare apples to apples — always use APY here and when shopping.
Yes — the rate is contractual, and deposits at FDIC-member banks (or NCUA credit unions) are insured up to $250,000 per depositor, per institution, per ownership category.
Most banks auto-renew into a same-term CD at the current (often worse) rate after a short grace period, typically 7–10 days. Calendar the maturity date; the grace period is your window to move the money.
Yes — it's ordinary income in the year it's credited, even if you don't withdraw it, and the bank issues a 1099-INT above $10. A CD inside an IRA defers that.
Not automatically. When short-term rates exceed long-term ones (an inverted curve), a 12-month CD can out-yield a 5-year. And locking in a long term costs flexibility — that's what laddering solves.
Yes. Every calculation happens locally in your browser — nothing you enter is uploaded or stored.
Savings rates float and can drop any month; CD rates are locked. If rates are falling, the CD's lock works for you; if rising, the savings account catches up. Split money by when you'll need it.
A CD is one of the few financial products where the math is exactly as advertised — this calculator just does it faster. Compare the maturity values, mind the penalty schedule, and consider a ladder before locking up money you might want back. For growth with contributions over time, see the Compound Interest Calculator.