Calculate how much interest a certificate of deposit will earn over its term. Compare rates and compounding frequencies.
A Certificate of Deposit (CD) is a savings product that pays a fixed interest rate for a set term, ranging from 3 months to 5+ years. In exchange for locking your money up for the term, you receive a higher rate than a standard savings account. CDs are FDIC insured up to $250,000, making them one of the safest investments available. The trade-off is that withdrawing early typically triggers a penalty equal to several months of interest.
Enter your deposit amount, the APY (annual percentage yield), the CD term in months, and the compounding frequency. The calculator shows your total interest earned and final value at maturity. Compare multiple CDs side by side to find the best combination of rate and term for your situation.
CD ladder: Instead of putting all your money in one long-term CD, split it across CDs of varying terms (e.g., 1-year, 2-year, 3-year). As each matures, reinvest in the longest term. This provides regular access to a portion of your funds while capturing higher long-term rates. The CD Ladder Calculator helps you set one up. No-penalty CDs: Some banks offer CDs that allow early withdrawal without penalty, usually at slightly lower rates. These are useful when you want a guaranteed rate but might need access to the money. Brokered CDs: Available through brokerage accounts, these can be sold on the secondary market before maturity, though the price may be above or below face value.
CD interest rates in 2026 are closely tied to the Federal Reserve's benchmark rate. As of early 2026, competitive CD rates from online banks and credit unions range from approximately 4.00% to 5.00% APY for most terms. Short-term CDs (3-6 months) typically offer 4.00-4.50% APY, 1-year CDs offer 4.25-4.75%, and longer-term CDs (3-5 years) may offer slightly lower rates of 3.75-4.25% as banks anticipate future rate cuts. Traditional brick-and-mortar banks generally offer lower rates (0.50-2.00% below online banks), making it worth shopping online for the best CD rates.
CD interest is typically compounded daily or monthly. With daily compounding, a $10,000 CD at 4.50% APY earns approximately $450 in interest over one year. The formula is: Final Value = Principal x (1 + APY/n)^(n x t), where n is the compounding frequency and t is the term in years. The difference between daily and monthly compounding on a 1-year CD is minimal (roughly $1-$3 per $10,000), but it becomes more noticeable on longer terms and larger deposits. The APY Calculator shows how compounding frequency affects effective yield.
3-month and 6-month CDs are best when you expect rates to rise or need access to funds soon. They sacrifice some yield for flexibility. 1-year CDs are the most popular term, offering a good balance of competitive rates and reasonable lock-up periods. 2-year and 3-year CDs lock in today's rate for longer, protecting against rate drops but sacrificing liquidity. 5-year CDs offer rate certainty but carry the highest opportunity cost if rates rise significantly. The CD Ladder Calculator shows how staggering maturity dates across multiple terms balances yield and liquidity.
Most CDs impose a penalty for withdrawing funds before the maturity date. Typical penalties are 3 months of interest for CDs with terms under 1 year, 6 months of interest for 1-year CDs, and 12 months of interest for CDs with terms of 2 years or longer. Some online banks offer no-penalty CDs that allow early withdrawal without forfeiting interest, though these typically offer slightly lower rates (0.10-0.25% less). Before opening a CD, always check the early withdrawal penalty terms, as they vary significantly between institutions.
While this calculator works for any bank's CD rates, the results are most useful when you enter the actual APY offered by a specific institution. Check your bank's current CD rates on their website, then enter the deposit amount, APY, and term here to see your exact earnings. For comparing rates across banks, resources like Bankrate and NerdWallet maintain updated lists of the highest CD rates available nationally. Credit unions often offer rates 0.10-0.25% above banks for equivalent terms and are worth checking through the National Credit Union Administration (NCUA) website.
High-yield savings accounts (HYSAs) currently offer rates competitive with short-term CDs (4.00-4.50% APY) with full liquidity. This makes short-term CDs (under 6 months) less attractive than in previous rate environments. CDs become more advantageous when you want to lock in a rate for 1 year or longer, protecting against potential rate decreases. If the Fed begins cutting rates, HYSA rates will drop immediately while your CD rate remains fixed. The Savings Goal Calculator helps determine how much to allocate between CDs and savings accounts for different financial goals.