CD Calculator

Understanding Certificate of Deposit (CD) Returns

A certificate of deposit (CD) earns a fixed interest rate over a set term. The balance at maturity is calculated with A = P × (1 + r/n)^(n×t), where P is the deposit, r is the annual rate, n is the compounding frequency per year, and t is the term in years. The APY (Annual Percentage Yield) accounts for compounding: APY = ((1 + r/n)^n − 1) × 100. This is the true measure of your annual return and is always at least equal to — often higher than — the stated rate.

Unlike a savings account, a CD locks your funds for the full term. This trade-off typically comes with higher rates. If you want flexibility with ongoing deposits, our Savings Calculator models monthly contributions with compound growth. For a deeper look at how compounding frequency affects returns, see our Compound Interest Calculator.

The effective daily rate shown above lets you compare a CD's daily earnings potential to other instruments. When comparing CDs from different banks, always use APY rather than the stated annual rate — APY standardizes for compounding, making true apples-to-apples comparisons easy. CD laddering (staggering multiple CDs with different maturity dates) is a popular strategy for balancing liquidity and yield.