CD Calculator
Calculate your Certificate of Deposit returns including compound interest, taxes, and inflation adjustments.
How CD Returns Work
A Certificate of Deposit (CD) locks your money for a fixed term at a guaranteed interest rate. Because you cannot withdraw early without a penalty, banks offer higher rates than regular savings accounts. Interest compounds over the term, growing your deposit predictably.
This calculator shows your raw return, what you keep after taxes on the interest, and what your money is worth in today's dollars after accounting for inflation.
Frequently Asked Questions
What is a CD?
A Certificate of Deposit is a savings product offered by banks and credit unions. You deposit a fixed amount for a set term (3 months to 5+ years) and earn a guaranteed interest rate. In exchange for locking up your money, you typically earn a higher rate than a regular savings account.
Are CD returns guaranteed?
Yes, the interest rate on a CD is fixed at the time of purchase and guaranteed for the full term. Additionally, CDs at FDIC-insured banks are protected up to $250,000 per depositor per institution. This makes them one of the safest places to park money you do not need immediately.
How can I compare CD returns across different terms?
Look at the APY (Annual Percentage Yield) rather than the stated interest rate. APY accounts for compounding frequency, giving you a true apples-to-apples comparison. Also consider penalties for early withdrawal and whether a longer lock-up is worth a slightly higher rate for your situation.
How much does a $10,000 CD make in a year?
At a 5% APY with daily compounding, a $10,000 CD earns about $512 in one year before taxes. At 4% APY, it would earn about $408. Your actual take-home depends on your tax bracket since CD interest is taxed as ordinary income.
How do you calculate CD interest?
CD interest uses the compound interest formula: A = P(1 + r/n)^(nt), where P is your principal, r is the annual rate, n is compounding periods per year, and t is time in years. Daily compounding earns slightly more than monthly because you earn interest on interest more frequently.
Can you get a 6% CD?
CD rates depend on the broader interest rate environment set by the Federal Reserve. During periods of high rates, some banks and credit unions offer CDs above 5%. Rates at 6% or higher are rare and typically require longer terms or special promotional offers. Shop around online banks for the best current rates.