CD calculator
What a CD pays, month by month, to the day it matures.
Your CD
1-yearHeld to maturity at a fixed rate, interest left in the CD. Before tax; no early-withdrawal penalty.
- Interest earned
- $400.00
- Average a month
- $33.33
- Rate, compounded daily
- 3.922%
Month by month
| Month | Interest | Balance |
|---|---|---|
| 1 | $32.74 | $10,032.74 |
| 2 | $32.84 | $10,065.58 |
| 3 | $32.95 | $10,098.53 |
| 4 | $33.06 | $10,131.59 |
| 5 | $33.17 | $10,164.76 |
| 6 | $33.28 | $10,198.04 |
| 7 | $33.39 | $10,231.42 |
| 8 | $33.50 | $10,264.92 |
| 9 | $33.60 | $10,298.52 |
| 10 | $33.71 | $10,332.24 |
| 11 | $33.83 | $10,366.06 |
| 12 | $33.94 | $10,400.00 |
How a CD grows
A certificate of deposit usually locks your money at a fixed rate for a set term. Interest usually compounds daily or monthly and is credited on a schedule, and once credited it earns interest of its own.
The APY is the rate with that compounding already counted: it's what one year actually earns. Over a longer term the balance grows by the APY each year, so a 5-year CD earns more than five times a 1-year CD's interest at the same APY.
If the bank quotes an interest rate instead, pick how often it compounds and the calculator works out the APY, so you can line it up against other offers.
Questions
- How much interest does a $10,000 CD earn?
- At 4.00% APY, $10,000 earns $400.00 in a year and is worth $10,400.00 at maturity. Over 5 years at the same APY it grows to $12,166.53, because each year's interest earns interest too.
- What's the difference between APY and the interest rate?
- The interest rate is before compounding; the APY includes it. 4.00% compounded daily is an APY of 4.081%, and compounded monthly it's 4.074%. That makes APY the number for comparing CDs: compounding is already in it.
- How much does a CD pay each month?
- Roughly a year's interest divided by 12: $400 a year is about $33 a month. In this calculator each month earns a touch more than the last as interest compounds; the first month of $10,000 at 4.00% APY earns $32.74.
- What if I take the money out early?
- Most banks charge an early-withdrawal penalty, usually a set number of months of interest, longer for longer terms. Withdraw early enough and it can cut into the deposit itself. This calculator assumes you hold the CD to maturity.
- Is CD interest taxed?
- In the US, CD interest is generally taxed as ordinary income in the year it's credited or made available to you, even if it stays in the CD, and the bank reports it on Form 1099-INT. Some CDs longer than a year that pay only at maturity are taxed as the interest accrues (Form 1099-OID), and a CD inside an IRA follows the IRA's rules. The figures here are before tax.
Educational only, not financial advice. Banks set their own rates, compounding and penalties; check the CD's disclosure before you open one. AlgoThesis is a publisher, not an adviser; see the disclaimer.