CodesBeautify

CD Calculator

See what a certificate of deposit pays at maturity for a given rate, term and compounding schedule.

Inputs
CD resultCalculated
Value at maturity10,459.40 after 12 months
Formula
AP x (1 + r / n) ^ (n x t)
Inputs
  P   deposit               10,000.00
  r   interest rate         4.50%
  n   compounding periods   12 (monthly)
  t   term                  12 months (1 year)
Working
r / n0.045 / 12 = 0.00375
n x t12 x 1 = 12 periods
(1 + 0.00375) ^ 121.045939825
A10,000.00 x 1.045939825 = 10,459.40
Results
  Value at maturity            10,459.40
  Interest earned              459.40
  Annual percentage yield      4.5940%
  Return over the whole term   4.594%
  Average interest per month   38.28
Runs locally in your browser

About the CD Calculator

A certificate of deposit locks money away for a fixed term in exchange for a rate the bank cannot cut halfway through. Working out the payout means compounding the deposit once per crediting period, which for a monthly schedule at 4.5 percent turns 10,000 into 10,459.40 after twelve months. The extra 9.40 over a flat 4.5 percent is what compounding contributes across the year.

Terms here are entered in months because that is how CDs are sold: 6, 9, 13, 18 and 60 month specials are all common, and a 13 month promotional certificate is easy to mis-model as a year. The compounding menu covers daily through annual, and the results include the annual percentage yield so a 4.5 percent monthly compounding certificate can be compared against a 4.55 percent one that only credits at maturity.

What the numbers exclude is early withdrawal penalties, which typically cost several months of interest and can eat into the principal on short certificates. Tax on the interest is also ignored, and in many countries it is due in the year the interest is credited rather than when the CD matures. If you want to compare two advertised savings rates without a fixed term, the APY Calculator is the quicker route, and the Compound Interest Calculator handles a plan you keep adding to.

How to use

  1. Enter the deposit you plan to lock away.
  2. Type the advertised interest rate. If the bank quotes APY, choose annual compounding to avoid counting it twice.
  3. Set the term in months, matching the certificate exactly.
  4. Pick the compounding schedule from the product terms, then read the maturity value and interest earned.

Common questions

What formula does a CD use?
A = P x (1 + r / n) ^ (n x t), where P is the deposit, r is the yearly rate, n is the compounding periods per year and t is the term in years.
Should I enter the rate or the APY?
Enter the nominal rate with the matching compounding schedule. If you only have the APY, select annual compounding so the figure is not inflated.
What happens if I withdraw early?
Most banks take back several months of interest and some can dip into principal on short terms. This calculation assumes the certificate is held to maturity.
Does it handle a 13 month term?
Yes. Terms are entered in months, so promotional lengths such as 13 or 18 months work without converting to years.