CD calculator
Enter the deposit, the interest rate and the term – the CD calculator shows the interest earned, the balance at maturity and the annual percentage yield (APY) as banks must disclose it. Choose how often interest compounds and, if you like, a tax rate to see what you keep.
Source: 12 CFR 1030 App. A, CFPB – Regulation DD (Truth in Savings), Appendix A: Annual Percentage Yield calculation. Updated: .
How it is calculated
How CD interest is calculated
With compounding, the balance at maturity is A = P × (1 + r/n)n × t, where P is the deposit, r the annual rate, n the compounding periods per year and t the term in years. Example: 10,000 at 4.5% compounded monthly for 12 months grows to 10,459.40 – 459.40 in interest.
APY vs. interest rate
The APY includes the effect of compounding, so it is higher than the interest rate unless interest is paid only once. Under Regulation DD (Truth in Savings), banks compute it as APY = 100 × [(1 + interest ÷ principal)365 ÷ days in term − 1]. For 4.5% compounded monthly, the APY is 4.59%.
| Compounding | Interest on 10,000 at 4.5%, 12 months | APY |
|---|---|---|
| at maturity (simple) | 450.00 | 4.50% |
| annually | 450.00 | 4.50% |
| monthly | 459.40 | 4.59% |
| daily | 460.25 | 4.60% |
CD terms and early withdrawal
Common terms are 3, 6, 12, 18 and 60 months. Taking money out early usually costs a penalty of several months’ interest, which can eat into the principal on short terms. Deposits at FDIC-insured banks are covered up to 250,000 per depositor, per bank, per ownership category.
CD interest is taxed as ordinary income in the year it is credited, even if you leave it in the CD. The optional tax field shows what you keep after tax.
Frequently asked questions
How much interest will I earn on a CD?
Multiply the deposit by (1 + rate ÷ compounding periods) raised to the number of periods, then subtract the deposit. 10,000 at 4.5% compounded monthly for one year earns 459.40.
What is the difference between APY and interest rate?
The interest rate is the nominal yearly rate. The APY adds the effect of compounding and shows what you actually earn in a year. Compare CDs by APY.
Is CD interest compounded daily or monthly?
It depends on the bank – daily and monthly are both common. Daily compounding earns slightly more: 460.25 instead of 459.40 on 10,000 at 4.5% for a year.
How is interest calculated on a 6-month CD?
For simple interest: deposit × rate × days ÷ 365. 10,000 at 4.5% for 183 days earns 225.62. With monthly compounding, it is a little more.
Do I pay taxes on CD interest?
Yes. CD interest counts as taxable interest income for the year it is credited, and the bank reports it on Form 1099-INT. Enter your tax rate to see the after-tax amount.
Sources and legal basis
- 12 CFR 1030 App. A: CFPB – Regulation DD (Truth in Savings), Appendix A: Annual Percentage Yield calculation
- FDIC – Understanding Deposit Insurance (250,000 per depositor, per bank, per ownership category)
As of:
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