CD Calculator — maturity value & effective annual rate

How it works

The growth is the compound-interest formula on a locked clock: M = P(1 + r/k)^(k·t/12) with t in months, because CD terms are quoted that way. The effective annual rate, (1 + r/k)^k − 1, restates any quote as one-compounding-per-year — the number that makes a daily-compounding CD comparable with a quarterly one, and the reason two CDs with the same nominal rate can pay differently. CFPB's shopping advice is the frame: when comparing offers, look at the term, the interest rate you earn, and the amount of the penalty for withdrawing before the end of the term. The penalty itself varies by bank and is not modeled here — the numbers on this page assume the money stays put; bank CDs are FDIC-insured and credit-union CDs NCUA-insured up to $250,000.

Worked example

The anchor is LibreTexts' published locked-deposit case, this page's preset: a $200 savings bond at 3.28% compounded semiannually, held 30 years, matures at $530.77 — the same formula a CD runs. On the default inputs — $10,000 at 4.5% compounded monthly for 12 months — this calculator computes about $10,459 at maturity, $459 of interest, at an effective annual rate of 4.59%: its own arithmetic on the published formula.

Frequently asked questions

What is a CD?

Per CFPB: a type of savings account offered by banks and credit unions where you generally agree to keep your money in place, without a withdrawal, for a specified length of time — the term. In exchange the rate is fixed and typically higher than an ordinary savings account's.

What happens if I withdraw early?

Withdrawing money early means paying a penalty fee to the bank (CFPB), and penalty structures vary — commonly some months of interest. This page does not model any penalty; its figures assume the money stays to maturity, so compare the penalty terms separately when shopping.

What is the effective annual rate and why compare on it?

The quote restated as if it compounded once a year: (1 + r/k)^k − 1. Two CDs quoting the same nominal rate but compounding differently pay different dollars — the effective rate collapses that difference into one comparable number, which is what this page computes for your quote.

Is a longer term always better?

It earns more interest if the money genuinely stays put — the term sweep shows how much — but a longer lock raises the odds of needing the money early and paying the penalty. That trade is yours; the table prices only the stay-to-maturity side.

Are CDs insured?

Per CFPB: CDs offered by banks are insured up to $250,000 by the FDIC, and those offered by credit unions up to $250,000 by the NCUA. The insurance covers the institution failing, not the early-withdrawal penalty.

How is a CD different from a savings account?

The lock: an ordinary savings account allows withdrawals and its rate can change; a CD fixes the rate for a term you commit to, with a penalty for leaving early. The savings calculator models ongoing deposits; this page models one locked sum.

How accurate is this, and what does it exclude?

The compounding arithmetic is exact for the quoted rate and frequency. It excludes early-withdrawal penalties, taxes on the interest, callable or bump-up CD features, and rate changes at rollover — a CD that auto-renews does so at the then-current rate, not the one entered here.