CD Calculator (Certificate of Deposit)

How to use this CD calculator

1. Enter your deposit and term. The term is in months, so a 5-year CD is 60 months.
2. Enter the rate you were quoted. Choose APY if the offer shows one. Choose interest rate if you only have a stated rate, then set how often it compounds. The result shows the other figure, so you can compare two offers on the same basis.
3. Open "More options" to set the penalty and tax. The early withdrawal penalty is an assumption you can change, because each bank sets its own. The calculator starts with 22% federal tax and no state tax as an example, so enter your own rates.
4. Test an early withdrawal if you might need the money. Turn on the test and pick a month. You'll see what you would walk away with, and the APY you would need elsewhere to come out ahead.

The rates on this page show how the math works. They are not current quotes, and nothing here is a recommendation. Before you open a CD, compare the term, the APY and the early withdrawal penalty in the offer.

How CD interest works

Federal Truth in Savings rules define APY as a percentage that reflects the total interest paid on an account over 365 days, based on the rate and how often it compounds. The official formula assumes all principal and interest stay on deposit for the whole term, and this calculator assumes the same. If your CD pays interest out to another account along the way, that money stops compounding, so your total will be a little lower than shown.

Compounding matters less than most people expect. Here is one stated rate of 4.00% on $10,000 for 12 months:

The gap between daily and yearly compounding is about $8 on $10,000. That is why you should compare CDs by APY, which already includes it.

What $10,000 earns in a CD

This table shows the interest earned before tax, with all the interest left in the CD until maturity. The APYs are examples, not market rates.

For scale, the FDIC's national rate for a 12-month CD was 1.76% in its update of October 19, 2026. That figure is an average weighted by deposits, so a single offer can be higher or lower. At a 1.76% APY, $10,000 earns $176 in 12 months, compared with $400 at 4.00%. That $224 gap is far bigger than the $8 from compounding, so shop for the rate first.

How a CD ladder works

A CD ladder spreads your money across several CDs that mature at different times. You don't have to guess one right term, and part of your money comes free at regular intervals, so you are less likely to pay a penalty when you need cash.

A common version splits your money into five equal parts, in CDs of one to five years. Each year one CD matures. You can spend that money, or put it into a new 5-year CD at the rate offered then. After four years, every rung is a 5-year CD, and one of them still matures each year.

Here is $10,000 split that way, using 4.00% APY on every rung to keep the example simple:

This total leaves out whatever each maturing rung earns next. One 5-year CD at the same APY would earn $2,166.53, but the whole $10,000 would be locked up for five years. A ladder trades some of that interest for regular access. Real offers also differ by term, and a longer term doesn't always pay a higher rate, so run each rung with its actual APY.

The rules that apply to CDs

• Disclosure. Under Regulation DD, the Truth in Savings rule, banks must tell you the APY, whether an early withdrawal penalty may apply, how it is worked out, and when it applies.
• Early withdrawal penalties. Federal rules set a minimum of seven days' simple interest on money withdrawn within six days of deposit. There is no federal maximum. Banks set their own penalties, which they may state in months of interest, and your account agreement is what counts.
• Deposit insurance. FDIC coverage is $250,000 per depositor, per insured bank, for each account ownership category, counting principal and accrued interest. Deposits in the same category at one bank are added together, so a CD and a savings account can share one limit. The NCUA gives the same standard limit on share certificates at federally insured credit unions.
• Income tax. CD interest is taxable, and you add it to your other income. You must report it even if you don't get a Form 1099-INT, which banks send when interest reaches $10. Credit union "dividends" on share accounts count as interest.
• Timing. Interest paid at intervals of a year or less, and interest on a CD of a year or less paid at maturity, is generally taxable when you receive it or can take it without a substantial penalty. On a CD longer than a year, you generally report part of the interest each year, even if it isn't paid until maturity. The IRS treats that yearly share as original issue discount, which is reported on Form 1099-OID.
• Penalties and tax. If you pay an early withdrawal penalty, you still report all the interest, then deduct the penalty on Schedule 1 of Form 1040. Form 1099-INT shows the penalty in box 2.
• Net investment income tax. Interest also counts toward the 3.8% tax on net investment income, which can apply above $200,000 of modified adjusted gross income for single filers and $250,000 for joint filers.

This page is for education, not tax or investment advice. To see how money grows when you keep adding to it, try the compound interest calculator. To work backward from a target, use the savings goal calculator. If you want to see what your paycheck leaves for saving, the paycheck calculator shows your take-home pay.

This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.