What is a CD Calculator?
The CD Calculator helps you calculate the total interest earned on a Certificate of Deposit (CD). It considers the interest rate, CD term, and compounding frequency to provide an accurate estimate of your returns.
CDs are a great option for risk-free savings because they offer **fixed returns** over a specific period.
How to Use the CD Calculator?
- Step 1: Enter your **initial deposit amount**.
- Step 2: Select the **CD term (months/years)**.
- Step 3: Choose the **annual interest rate**.
- Step 4: Select the **compounding frequency** (daily, monthly, quarterly, annually).
- Step 5: Click “Calculate” to see your **final amount** and **interest earned**.
Try our Savings Calculator to compare other investment options.
CD Calculator Formula
The formula for calculating CD returns is:
A = P (1 + r/n)^(nt)
Where:
- A = Final amount after maturity
- P = Initial deposit (principal)
- r = Annual interest rate (decimal form)
- n = Compounding frequency per year
- t = CD term in years
For example, a **$10,000 deposit** at **5% interest** for **5 years** (compounded monthly) results in a **final amount of $12,763.57**.
Why Use a CD Calculator?
- Predict your **total earnings** before investing in a CD.
- Compare different **interest rates and terms**.
- Understand how **compounding frequency** impacts your returns.
- Find the best **CD options** for maximizing savings.
Check out our Compound Interest Calculator for additional savings insights.
CD vs. Savings Account – What’s the Difference?
| Feature | CD (Certificate of Deposit) | Savings Account |
|---|---|---|
| Interest Rate | ✅ Higher | ❌ Lower |
| Funds Access | ❌ Locked for a Fixed Term | ✅ Withdraw Anytime |
| Best for Long-Term? | ✅ Yes | ❌ No |
Use our High-Yield Savings Calculator to explore other saving options.
Frequently Asked Questions (FAQs)
What happens if I withdraw my CD early?
Early withdrawal may result in **penalty fees** or **loss of interest earnings**.
How often do CDs compound interest?
It depends on the bank—options include **daily, monthly, or quarterly compounding**.
Can I add more money to my CD after opening?
Generally, no. Most CDs **do not allow additional deposits** after opening.
What is the best CD term for high returns?
Longer terms (**3+ years**) usually offer **higher interest rates**.
Are CDs a safe investment?
Yes, CDs are insured by the FDIC (up to $250,000 per depositor).