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A certificate of deposit locks in a fixed interest rate for a set term in exchange for leaving your money untouched — but the compounding frequency your bank uses changes exactly how much you'll actually earn.
This calculator finds the maturity value and total interest earned on a CD, given its principal, APY, term, and compounding frequency.
How it works
Enter the deposit amount, the annual percentage yield (APY), the term in months, and how often interest compounds. The calculator applies the compound interest formula to find the balance at maturity and the total interest earned over the term.
- Enter deposit amount ($).
- Enter annual percentage yield (APY %).
- Enter term (months).
- Enter compounding frequency.
- Click Calculate to see your results.
Examples
A 1-year CD
A $10,000 deposit at 4.5% APY compounded monthly for 12 months matures to $10,459.40 — $459.40 in interest earned.
Who should use it
- Comparing CD offers from different banks before opening one.
- Projecting how much a fixed-term savings deposit will grow.
Industry applications
- Personal banking and savings planning
- Retirement and short-term cash management
Advantages
- Supports daily, monthly, quarterly, and annual compounding.
- Shows the full compound interest formula with your numbers substituted in.
Limitations
- Doesn't model early withdrawal penalties or step-up/bump-up CD rate changes.
Common mistakes to avoid
- Comparing two CDs by their nominal rate alone instead of their APY and compounding frequency together.
- Forgetting that most CDs charge a penalty for withdrawing before the term ends.
Best practices
- Compare CDs by their APY, not their stated interest rate, since APY already reflects the effect of compounding.
Tips
- For the same APY, daily compounding earns marginally more than annual compounding — the difference is usually small but grows with a larger principal or longer term.