Financial · Live
Your CD at maturity,
to the cent.
See exactly what your Certificate of Deposit will be worth on its maturity date. Enter your initial deposit, term, and APY, the calculator returns the total balance, total interest earned, the equivalent nominal rate, and a smooth growth curve from today to maturity.
Inputs
CD details
- APY
- 4.5%
- Nominal rate
- 4.402%
- Per-period (daily)
- 0.01206%
- Per-period interest
- $1.21
Maturity goal
5 years · daily
Total balance on Thursday, May 15, 2031.
Rate breakdown
APY vs. nominal
Effective annual yield · what banks advertise
Stated daily-compounding rate
Field guide
How CD interest compounds.
A Certificate of Deposit pays a fixed interest rate for a fixed term, typically 3 months to 5 years. Interest accrues on the balance and is added back to the balance on a schedule the bank chooses, so each subsequent compounding period earns interest on a slightly bigger pile. That's the “magic of compounding” and on a CD, the schedule is locked in by your deposit agreement.
The two rates: nominal and APY
US banks must quote CDs by APY (Annual Percentage Yield) under the Truth in Savings Act. APY is the effective annual return after compounding has been applied. Behind the scenes, the bank uses a nominal annual rate: the periodic rate multiplied by periods per year, and that's very slightly lower:
nominal = n · ((1 + APY)1/n − 1)
For a 5.00% APY compounded daily (n = 365), the nominal rate is about 4.879%. Same money, just two ways of describing it. APY is the apples-to-apples number for comparing offers.
The compound-interest formula on a CD
For an initial deposit P, an APY of r, and a term of t years, the maturity balance is simply:
That's mathematically identical to the periodic-form of the same calculation:
For a $10,000 deposit at 4.5% APY for 5 years:
interest = A − P = $2,461.82
Why does compounding frequency matter so little?
APY normalises away most of it. At a fixed 5% APY for 5 years on $10,000:
- Annual compounding:
$12,762.82 - Quarterly:
$12,762.82 - Monthly:
$12,762.82 - Daily:
$12,762.82
They're identical because APY already includes the effect of compounding. Frequency only shifts the equivalent nominal rate. Where compounding frequency actually matters is when rates are quoted as nominal (corporate notes, some bonds): a 5% nominal rate compounded daily yields a 5.127% APY versus 5.000% for annual compounding.
Does my interest go into the same CD or a separate account?
Most US banks credit CD interest to a linked savings or checking account by default; some keep it inside the CD as principal. The two patterns produce different consequences:
- Compounded inside the CD: the projection this calculator shows. Each interest credit becomes part of the principal, earning more interest.
- Paid to a linked account: the CD effectively earns simple interest. The total interest over a 5-year, 5% CD on $10,000 drops from
$2,762.82compounded down to$2,500.00simple, about 10% less.
Always check which mode your bank uses; if you can choose, keep the interest inside the CD to capture the full compounding effect.
Read this first
Understanding early withdrawal penalties
Locking in a CD's rate is the trade you make for giving up access to the money. If you take it back early, the bank charges a penalty and on short-held CDs, that penalty can eat into your principal, not just your interest. Read your deposit agreement carefully before signing.
Under 1 year
90 days of interest
Roughly 1.5% of principal at 6% APY. Painful but recoverable.
1 – 3 years
180 days of interest
A typical 'middle-tier' penalty, about 3% of principal at 6% APY.
4+ years
365 days of interest
A full year's interest. On a long CD this can equal 5–7% of principal.
The crucial rule
The penalty can dip into your principal.
If you withdraw a CD early and the accrued interest isn't enough to cover the penalty, the bank takes the difference from your principal. Federal law allows this. So a 5-year, 6% CD broken in month 2 could return less than your original deposit. Always check the deposit agreement for “may invade principal” language before opening.
Three ways to soften the blow
Strategies to protect liquidity.
- Build a CD ladder. Stagger 1- to 5-year CDs so one matures every year. Free liquidity without sacrificing the long-term rate.
- Use a no-penalty CD. Yields are about 0.25–0.50 percentage points lower, but you can withdraw freely after the initial 7-day lock-up.
- Keep an emergency fund. Hold 3–6 months of expenses in a high-yield savings account so you never have to break a CD to cover a surprise.
Worked example: 18-month CD at 4.75% APY
A $25,000 deposit, 18-month term, 4.75% APY, daily compounding. Term in years: 1.5. The maturity balance is:
interest = $1,793.46
nominal rate ≈ 4.640%
That “nominal rate” is what the deposit agreement might call the periodic rate × 365; what actually accrues each day. The APY rolls compounding into a single annualised number you can compare against any other yield product.
Why the maturity number is exact
Unlike stocks, bonds, or money-market funds, a CD's return is contractually fixed. As long as you don't add or withdraw funds, the maturity balance is determined entirely by today's deposit, today's APY, and the term. The only meaningful variables that can change it are:
- Variable-rate CDs. Some CDs reset rates tied to a benchmark; this calculator assumes a fixed rate.
- Step-up CDs. Pre-scheduled rate increases over the term. Calculate each tier separately.
- Bump-up CDs. One-time rate adjustment at the holder's option if rates rise during the term.
- Brokered CDs. Held in brokerage accounts; can have callable features that let the bank redeem early at no benefit to you.
Tax considerations
CD interest is taxed as ordinary income at federal and (most) state levels in the year it's credited, even if you don't withdraw it. Banks send a Form 1099-INT for any account paying $10 or more in a year. Holding the CD inside a Roth IRA, traditional IRA, or HSA defers or eliminates the tax, at the cost of contribution-limit constraints.
Disclaimer
This calculator models a fixed-rate, fixed-term CD at the APY you enter. It does not account for taxes, early withdrawal penalties, fees, FDIC insurance limits, or variable / step-up / brokered features. Calculations are educational estimates and are not financial, accounting, or tax advice. Confirm specifics with your bank or a licensed advisor before making a deposit.