How this calculator works
A certificate of deposit (CD) locks in a fixed rate for a fixed term in exchange for a rate that is usually higher than a regular savings account. Because the rate advertised on a CD is already an APY (it accounts for the bank's compounding schedule), the maturity value can be calculated directly from the deposit, the APY, and the term.
This calculator raises the account's growth factor to the power of the term expressed in years, so it works the same way whether the term is a few months or several years. Reinvesting a matured short-term CD into another CD of the same rate for the remaining time produces the same result as a single longer-term CD, since compounding is multiplicative.
The formula
Value at maturity = deposit × (1 + APY)^(months ÷ 12)Interest earned = value at maturity − depositAPY is entered as a decimal (rate ÷ 100) and months ÷ 12 converts the term to years so partial-year terms work correctly.
Worked example: $10,000 at 4.5% APY for 12 months
- Term in years: 12 ÷ 12 = 1.
- Value at maturity = 10,000 × (1.045)^1 = $10,450.
- Interest earned = 10,450 − 10,000 = $450.
- For a 6-month CD at the same 4.5% APY, the exponent becomes 6 ÷ 12 = 0.5, giving 10,000 × 1.045^0.5 ≈ $10,222.52 — roughly half the interest, since only half a year has passed.
Frequently asked questions
What happens if I withdraw before the CD matures?
Most banks charge an early-withdrawal penalty, commonly a set number of months of interest, which can reduce your return below what you would have earned in a regular savings account. Check the specific institution's penalty schedule before committing funds you might need early.
Is the rate on a CD an APY or an APR?
CDs are typically advertised using APY, which already reflects the bank's compounding schedule. That is why this calculator applies the rate directly as an annual growth factor rather than converting it first.
Does a longer term always mean more interest?
For a fixed positive APY, yes — a longer term always produces more total interest, since the growth factor is raised to a larger power. Whether it is the best choice also depends on whether a longer-term CD offers a higher rate and whether you can commit the funds for that long.
How does a CD compare to a high-yield savings account?
A CD usually locks in a fixed rate for the full term, while a savings account's rate can change at any time and the funds stay accessible. Compare the CD's APY against the savings account's current APY, factoring in the early-withdrawal penalty if you might need the money sooner.
How do I calculate a CD's value for a term that isn't a whole number of years?
Convert the term to years by dividing the number of months by 12, then use that as the exponent in the same formula: value at maturity = deposit × (1 + APY)^(months ÷ 12). For example, a 6-month CD at 4.5% APY uses an exponent of 6 ÷ 12 = 0.5, giving 10,000 × 1.045^0.5 ≈ $10,222.52 on a $10,000 deposit — roughly half the interest of the same CD held for a full 12 months.