CD Calculator
Calculate Certificate of Deposit returns, interest earned, and compare CD rates with different terms and compounding frequencies
CD Calculator
Choose what you want to calculate based on available data
Amount you plan to deposit in the CD
Annual interest rate offered by the CD
Number of years to invest
Additional months (0-11)
How often interest is compounded - Monthly
CD Investment Results
Formula: FB = ID × (1 + r/m)m×t
Principal: $10,000
Interest Rate: 4.5% annually
Compounding: Monthly
Term: 2 years 0 months
Total Periods: 24
Investment Analysis
Example CD Calculation
5-Year CD Investment Example
Initial Deposit: $10,000
Annual Interest Rate: 4.5%
Term: 5 years
Compounding: Monthly (12 times per year)
CD Calculation Steps
Formula: FB = $10,000 × (1 + 0.045/12)12×5
Step 1: Convert rate to decimal: 4.5% = 0.045
Step 2: Calculate (1 + 0.045/12) = 1.00375
Step 3: Raise to power (12 × 5) = 60
Step 4: 1.0037560 = 1.2516
Final Balance: $10,000 × 1.2516 = $12,516
Interest Earned: $12,516 - $10,000 = $2,516
Compounding Frequency Comparison
Annually
Interest: $920.25
Quarterly
Interest: $936.246
Monthly
Interest: $939.901
Daily
Interest: $941.682
CD Benefits
FDIC/NCUA insured up to $250,000
Guaranteed returns with fixed interest rates
Higher rates than traditional savings accounts
No market volatility or investment risk
Predictable income for financial planning
Early withdrawal penalties apply
Understanding Certificates of Deposit (CDs)
What is a Certificate of Deposit?
A Certificate of Deposit (CD) is a time deposit offered by banks and credit unions that pays a fixed interest rate for a specified term. CDs are considered one of the safest investment options as they are FDIC or NCUA insured.
How CDs Work
- •You deposit money for a fixed term (1 month to 10+ years)
- •The bank pays you a guaranteed interest rate
- •Interest compounds based on the bank's schedule
- •You receive principal plus interest at maturity
CD Calculation Formula
Final Balance = Initial Deposit × (1 + Interest Rate / Compounding Frequency)Compounding Frequency × Years
- Initial Deposit: Amount you invest in the CD
- Interest Rate: Annual interest rate (as decimal)
- Compounding Frequency: How often interest compounds
- Years: Investment term length
Note: More frequent compounding increases your returns. Daily compounding typically provides the highest yield for the same interest rate.
Types of CDs
Traditional CDs
- • Fixed rate and term
- • Most common type
- • Predictable returns
- • FDIC/NCUA insured
Jumbo CDs
- • Higher minimum deposit ($100K+)
- • Better interest rates
- • Same FDIC protection
- • For larger investors
Callable CDs
- • Bank can redeem early
- • Higher initial rates
- • Interest rate risk
- • More complex terms
CD vs Other Investments
| Investment Type | Risk Level | Liquidity | Typical Return | Insurance |
|---|---|---|---|---|
| Certificate of Deposit | Very Low | Low (penalties) | 2-6% annually | FDIC/NCUA |
| Savings Account | Very Low | High | 0.5-2% annually | FDIC/NCUA |
| Stock Market | High | High | 8-12% annually | None |
| Bonds | Medium | Medium | 3-7% annually | Varies |