CD Calculator
Calculate CD returns, build ladders, and compare certificate of deposit options
Certificates of Deposit (CDs) offer a safe way to earn guaranteed returns on your savings. Use our CD calculator to estimate your earnings, build a CD ladder strategy for balanced liquidity, compare different CD options, or calculate the cost of early withdrawal. FDIC-insured CDs protect your principal up to $250,000 per depositor.
Open Source & Transparent
All calculations are open source and verifiable on GitHub. We believe in transparency and welcome contributions to improve our tools.
CD Maturity Value
Excellent Rate12 month term
$10,500.00
Total Interest
$500.00
APY
5.00%
Principal
$10,000.00
After-Tax Interest
$390.00
CD Details
Early Withdrawal Calculator
See the impact of withdrawing before maturity
Typical CD Rates (Reference)
| Term | Avg APY | High APY | Interest on $10K |
|---|---|---|---|
| 6 months | 4.30% | 5.00% | $250.00 |
| 1 year | 4.20% | 5.00% | $500.00 |
| 2 years | 3.80% | 4.50% | $900.00 |
| 3 years | 3.50% | 4.20% | $1,260.00 |
| 5 years | 3.20% | 4.00% | $2,000.00 |
* Rates shown are national averages and top rates. Always compare current rates before opening a CD.
Maturity Value
$10,500.00
After-Tax Analysis
Inflation-Adjusted
CD Tips
•Shop around – Online banks often offer higher rates than traditional banks.
•Consider a CD ladder – Balance liquidity with higher long-term rates.
•Check penalties – Know the early withdrawal terms before committing.
•FDIC insured – CDs are insured up to $250,000 per depositor.
FDIC Protection
CDs at FDIC-insured banks are protected up to $250,000 per depositor, per institution. This makes CDs one of the safest investment options available.
Understanding Certificates of Deposit (CDs)
A Certificate of Deposit (CD) is a time-deposit savings account that pays a fixed interest rate for a specified term. Unlike regular savings accounts, CDs require you to keep your money deposited for the full term to earn the promised rate. In exchange for this commitment, CDs typically offer higher interest rates than standard savings accounts.
CDs are one of the safest investment options available because they're FDIC insured up to $250,000 per depositor, per institution. This means your principal is protected even if the bank fails. Our CD calculator helps you maximize your CD returns by calculating earnings, comparing options, and building optimal CD ladder strategies.
APY vs APR: What's the Difference?
APY
Annual Percentage Yield
Includes compound interest. This is what you'll actually earn. Always compare CDs using APY.
APR
Annual Percentage Rate
Simple interest rate without compounding. APY will be higher than APR for CDs that compound.
Example: A CD with 5% APR compounding daily has an APY of 5.13%. Over 1 year, $10,000 earns $513 (APY) vs $500 (simple APR).
The CD Ladder Strategy
A CD ladder is a savings strategy that divides your money across multiple CDs with staggered maturity dates. This gives you the best of both worlds: higher long-term rates and regular access to your money.
Divide Your Savings
Split your total into equal portions (e.g., 5 CDs for a 5-year ladder)
Stagger Maturity Dates
Buy CDs with 1, 2, 3, 4, and 5 year terms
Reinvest at Maturity
As each CD matures, reinvest in a new 5-year CD
Benefits: Once established, a 5-year ladder gives you access to 1/5 of your funds every year while earning higher long-term rates. Use our CD Ladder Builder tab to create your optimal ladder strategy.
Understanding Early Withdrawal Penalties
If you need to access your CD funds before maturity, you'll typically pay an early withdrawal penalty. The penalty is usually calculated as a certain number of months of interest.
| CD Term | Typical Penalty | Example ($10,000 at 5%) |
|---|---|---|
| 3-6 months | 3 months interest | ≈$125 penalty |
| 12 months | 3-6 months interest | ≈$125-250 penalty |
| 2-3 years | 6 months interest | ≈$250 penalty |
| 4-5 years | 12 months interest | ≈$500 penalty |
Warning: If you withdraw very early (e.g., after 2 months on a 5-year CD), the penalty can exceed your earned interest, meaning you'll receive less than your original deposit.
CDs vs Other Savings Options
| Option | Typical Rate | Liquidity | Best For |
|---|---|---|---|
| CDs | 4.5-5.5% | Locked | Fixed goals, rate lock |
| High-Yield Savings | 4.0-5.0% | Instant | Emergency funds, flexibility |
| Treasury Bills | 4.5-5.5% | At Maturity | State tax-free income |
| I Bonds | Inflation-linked | 1 Year Min | Inflation protection |
| Money Market Funds | 4.5-5.2% | 1-2 Days | Higher amounts, flexibility |
* Rates as of December 2025. Check current rates before investing.
CD Tax Considerations
- • CD interest is taxed as ordinary income at your marginal tax rate (10%-37%)
- • Interest is taxable in the year it's credited to your account, even if you don't withdraw it
- • For multi-year CDs, you'll receive a 1099-INT each year for credited interest
- • Consider IRA CDs for tax-advantaged retirement savings
Frequently Asked Questions
What is a CD (Certificate of Deposit)? ▼
A Certificate of Deposit (CD) is a savings product that earns interest at a fixed rate for a fixed term, typically ranging from 3 months to 5 years. CDs typically offer higher interest rates than regular savings accounts in exchange for locking up your money for the agreed term. They are FDIC insured up to $250,000 per depositor.
What is a CD ladder and why should I build one? ▼
A CD ladder is a strategy where you divide your investment across multiple CDs with staggered maturity dates. This provides regular access to a portion of your funds while still earning higher long-term rates. For example, a 5-year ladder might have CDs maturing every year, giving you annual liquidity while averaging higher rates.
What happens if I withdraw from a CD early? ▼
Early withdrawal from a CD typically incurs a penalty equal to several months of interest. Penalties vary by institution and term length, ranging from 3 months interest for short-term CDs to 12+ months for long-term CDs. In some cases, the penalty can eat into your principal if you withdraw very early.
Are CDs a good investment right now? ▼
CDs can be an excellent choice for risk-averse investors seeking guaranteed returns. With FDIC insurance, your principal is protected up to $250,000. In a high-interest-rate environment, CDs offer competitive yields compared to savings accounts. However, consider your liquidity needs and compare CD rates against high-yield savings accounts and Treasury bills.
How is CD interest taxed? ▼
CD interest is taxed as ordinary income at your marginal tax rate. Interest is typically reported on Form 1099-INT and must be reported in the year it is credited to your account, even if you don't withdraw it. For multi-year CDs, you may owe taxes on interest each year, not just at maturity.
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