Calculate your certificate of deposit maturity value, compare terms, and see how compounding affects your returns.
A Certificate of Deposit (CD) is a federally insured savings product offered by banks and credit unions. When you open a CD, you agree to deposit a fixed amount of money for a set period — called the term — in exchange for a guaranteed interest rate that's typically higher than a standard savings account. At the end of the term (the maturity date), you receive your original deposit plus all accumulated interest.
CDs are popular among conservative investors because they offer FDIC-insured, predictable returns with zero market risk. In a high-interest-rate environment, CDs become especially attractive compared to volatile stock investments. They're FDIC-insured up to $250,000 per depositor, per bank, making them one of the safest places to park your money.
CD interest uses the compound interest formula: FV = P × (1 + r/n)nt, where:
Banks advertise rates as APY (Annual Percentage Yield), which already accounts for compounding. The actual nominal rate (APR) is slightly lower. For example, a 4.50% APY with daily compounding corresponds to an APR of about 4.40%. This calculator converts the advertised APY to APR internally for accurate calculations.
Suppose you deposit $10,000 in a CD paying 4.50% APY, compounded monthly, for 1 year:
Both CDs and high-yield savings accounts (HYSAs) are FDIC-insured and pay interest. The key differences:
A Certificate of Deposit (CD) is a time-deposit savings product offered by banks and credit unions. You agree to lock your money for a fixed term (e.g., 6 months, 1 year, 5 years) in exchange for a guaranteed interest rate, which is typically higher than a regular savings account. At the end of the term — called the maturity date — you receive your original deposit plus all accrued interest.
APY (Annual Percentage Yield) is the effective annual rate of return that accounts for the effect of compounding. APR (Annual Percentage Rate) is the stated annual rate without compounding. For CDs, banks advertise the APY because it reflects the actual return you earn. For example, a 4.50% APY with monthly compounding corresponds to an APR of approximately 4.41%.
Most banks charge an early withdrawal penalty (EWP) if you cash out before the maturity date. The penalty is typically measured in months of interest — for example, 3 months of interest for short-term CDs or 6 months for longer terms. Some banks offer no-penalty CDs, but these usually come with lower interest rates.
Yes. CDs at FDIC-member banks are insured up to $250,000 per depositor, per bank. Credit union CDs (called "share certificates") are similarly insured by the NCUA. This makes CDs one of the safest savings vehicles available.
A CD ladder is a strategy where you divide your deposit across multiple CDs with staggered maturity dates (e.g., 1-year, 2-year, 3-year). As each CD matures, you reinvest it into a new long-term CD. This gives you regular access to your money while still capturing higher long-term rates.