CD Calculator
See what a certificate of deposit grows to at maturity, the interest it earns, and its true annual percentage yield.
| Year | Balance | Interest earned |
|---|---|---|
| 1 | $10,512 | $512 |
| 2 | $11,049 | $1,049 |
| 3 | $11,615 | $1,615 |
| 4 | $12,209 | $2,209 |
| 5 | $12,834 | $2,834 |
How it's calculated
A certificate of deposit, or CD, locks up a lump sum for a fixed term in exchange for a set interest rate, usually higher than a regular savings account. You cannot touch the money until it matures without paying a penalty, and in return the rate is guaranteed for the whole term. This calculator grows the deposit at that rate, compounding along the way, to show what it is worth when the term ends.
Take the default. A $10,000 deposit at a 5 percent rate compounded monthly for 5 years. The stated 5 percent works out to an effective APY of about 5.12 percent once monthly compounding is counted. The CD matures at $12,833.59, having earned $2,833.59 in interest, with no risk to the principal along the way.
Two things drive the result, the rate and the term. A higher rate or a longer term both grow the ending value, and locking in a good rate for longer protects it if rates later fall. Compounding frequency nudges the number up a little, but the rate itself matters far more, so compare CDs on the APY a bank advertises rather than how often they compound.
Assumptions
- A single lump-sum deposit that stays untouched for the full term, with the interest left in the CD to compound.
- The effective APY is (1 plus rate divided by n) to the power n, minus 1, where n is the number of compounding periods a year. Early-withdrawal penalties and taxes are not modeled.
Last updated: 2026-08-08
These assumptions follow our general methodology.
Frequently asked questions
How is a CD maturity value calculated?
The deposit compounds at the CD rate for the length of the term. Each period it earns the rate divided by the number of periods a year, and that interest is added to the balance so it compounds. The result at the end of the term is the maturity value.
What is the difference between the rate and the APY?
The rate is the stated nominal rate. The APY is what you actually earn once compounding is counted, so it is a little higher. A 5 percent rate compounded monthly is a 5.12 percent APY. Compare CDs on the APY, since that is the true yield.
What happens if I withdraw from a CD early?
Most CDs charge an early-withdrawal penalty, often a few months of interest, if you cash out before maturity. This calculator assumes you hold to maturity, so it does not subtract a penalty. Only lock up money you will not need during the term.
Is CD interest taxed?
Yes, in a taxable account the interest is taxed as ordinary income in the year it is credited, even if you leave it in the CD. This tool shows the pre-tax figures. Held inside an IRA, the interest is not taxed as it accrues.
Are CDs a good investment?
They suit money you want kept safe and know you will need on a set date, like a near-term goal or an emergency reserve. The return is guaranteed but modest, so for long-term growth a diversified investment portfolio has historically done far better, with more risk.