Certificate of Deposit
CD Rate Calculator
CD rate & interest calculator — compare returns and account earnings across every term, all at once.
№ 0435-0010000Series 2026A · Registered
This certifies that deposited at % APY, shall mature to $10,435.00 in one year — full schedule of every term below.
E*TRADE (Morgan Stanley) — 36-month CD. $0 minimum. Source: DepositAccounts 7/27/2026.
| Term | Interest | Ending balance | Effective return |
|---|
Endorsement · Verso
Work backwards from your goal
Turn the certificate over. Most people start with the number they need — not the number they have.
Use this CD early withdrawal penalty calculator to estimate what you lose if you withdraw before maturity. Compare penalty scenarios for 90-day, 180-day, and 365-day penalty schedules across all CD terms from 3 months to 10 years.
Most CDs charge 90–365 days of interest if you withdraw before maturity. This quick schedule reads your deposit above — for bank-by-bank schedules, the rules behind each tier, and worked examples, use the full CD early withdrawal penalty calculator.
| Scenario | Interest earned | Penalty | You keep |
|---|
CD interest is taxable as ordinary income. This schedule shows what you actually keep.
| Term | Pre-tax interest | Tax owed | After-tax balance |
|---|
§ 1 · Definitions
What Is a CD Account?
A Certificate of Deposit (CD) is a type of savings account offered by banks and credit unions. You agree to leave your money in the account for a fixed period — anywhere from 3 months to 20 years — and in return, the bank pays you a fixed, guaranteed interest rate that is typically far higher than a regular savings account.
CDs are FDIC insured up to $250,000 per depositor, per bank. Your principal is protected even if the bank fails. This makes CDs one of the safest ways to earn meaningful interest on cash you don’t need immediately.
Use the CD account calculator above to see exactly what your deposit earns at maturity — or learn to calculate CD interest step by step.
§ 2 · Comparison
CD vs Savings Account
| Feature | CD Account | Savings Account |
|---|---|---|
| APY / Rate | 4.00–5.50% APY | 0.01–4.50% APY |
| Access | Locked until maturity (penalty for early withdrawal) | Withdraw anytime (usually 6×/month limit) |
| Rate Type | Fixed for the entire term | Variable — can change at any time |
| Minimum | $0–$2,500 depending on the bank | Typically $0 |
| FDIC | Yes, up to $250,000 | Yes, up to $250,000 |
| Best For | Money you won’t need until a specific date | Emergency fund and everyday cash |
§ 3 · Current Rates
Current CD Rates by Term
Approximate market rates as of July 2026. Use this CD rate calculator with your actual bank’s rate for a precise estimate.
| Term | Typical APY | $10,000 at Maturity |
|---|---|---|
| 3 Months | 3.00% | $10,074 |
| 6 Months | 4.05% | $10,200 |
| 1 Year | 4.15% | $10,415 |
| 2 Years | 4.30% | $10,878 |
| 3 Years | 4.35% | $11,363 |
| 5 Years | 4.35% | $12,373 |
| 10 Years | 4.25% | $15,162 |
§ 4 · Method
How CD Interest Is Calculated
The standard compound interest formula for a Certificate of Deposit is:
Where P = initial deposit, r = annual interest rate (decimal), n = compounding periods per year (12 for monthly, 365 for daily), t = term in years, and PMT = any periodic additional contributions.
Worked Example
Suppose you deposit $10,000 into a CD with a 5% annual rate, compounded monthly, for a 3-year term.
A = (1 + 0.05/12)12×3 = (1.004167)36 = 1.16147
FV = $10,000 × 1.16147 = $11,614.72
Total interest earned = $11,614.72 − $10,000 = $1,614.72
Effective APY = (1 + 0.05/12)12 − 1 = 5.116%
Notice the APY (5.116%) — the effective annual yield — is slightly higher than the stated rate (5.00%) because monthly compounding reinvests interest throughout the year. Your total return on this CD is $1,614.72 in interest from a $10,000 deposit — a concept known as compound interest.
Want the full method with more worked examples? Read our step-by-step guide to how to calculate CD interest — the formula, APY vs rate, and a calculator you can try yourself.
§ 5 · Strategy
CD Strategies
CD Ladder
Spread your money across CDs with staggered maturities — for example, 1, 2, 3, 4, and 5-year terms. When the 1-year matures, reinvest it into a new 5-year CD. Repeat each year. The result: you eventually have a 5-year CD maturing every single year, giving you both higher long-term rates and annual access to your money without penalty.
Bump-Up CD
Some banks offer a “bump-up” feature that lets you raise your rate once during the term if market rates increase. These typically start with a slightly lower initial rate than a standard CD, but protect you if rates climb after you lock in.
No-Penalty CD
A no-penalty CD can be withdrawn at any time without paying an early withdrawal fee. The tradeoff: the rate is lower than a standard CD with the same term. Useful if you want higher yield than a savings account but aren’t certain you can leave the money untouched.
Brokered CDs
Sold through brokerages like Fidelity or Schwab, brokered CDs offer a wider selection of rates and terms from multiple banks. They can be traded on a secondary market, meaning their value fluctuates with interest rate changes — unlike a bank CD, which is simply held to maturity.
§ 6 · Disclosures
What to Watch Out For
Early Withdrawal Penalty
If you withdraw before the CD matures, most banks charge a penalty. Typical penalties: 3 months of interest for terms under 1 year, 6 months for 1–5 year terms, and 12 months for 5+ year terms. Use our penalty calculator above to see exactly what you’d lose.
Inflation Risk
A CD earning 5% with 3% inflation has a real return of only ~2%. Over long periods, inflation can erode your purchasing power even though your balance grows. CDs are safe, but they are not a hedge against inflation.
Tax on CD Interest
CD interest is taxed as ordinary income at your marginal federal rate — and in most cases, your state rate too. Interest is taxable in the year it is credited to your account, even if you don’t withdraw it. CDs held in an IRA or 401(k) defer this tax until withdrawal. Use the After-Tax Earnings section above to estimate your actual take-home return.
FDIC Insurance Limits
Each depositor is insured up to $250,000 per bank, per ownership category. If you hold more than $250,000 in CDs at a single bank, split the excess across multiple FDIC-insured institutions. Credit union CDs are insured by the NCUA for the same amount.
Automatic Renewal
Most CDs auto-renew at maturity into a new CD of the same term at the bank’s current rate — which may be lower than the original. Banks typically provide a grace period (7–10 days) after maturity to withdraw or change terms without penalty. Set a calendar reminder so you don’t get locked into a lower rate.
§ 7 · Questions on Record
Frequently Asked Questions
What is a CD account?
A Certificate of Deposit is a fixed-term savings account that pays a guaranteed interest rate. You lock your money for a set period and earn a higher rate than a regular savings account.
How does a CD account work?
You deposit money for a set term. The bank pays a fixed APY. At maturity, you receive your principal plus all accrued interest. Withdrawing early usually triggers a penalty of several months’ interest.
What is the difference between a CD and a savings account?
A CD locks your money at a guaranteed rate for a fixed term. A savings account lets you withdraw anytime, but the rate is typically much lower and can change at any time.
What is APY? How is it different from the interest rate?
APY (Annual Percentage Yield) includes the effect of compounding. The interest rate does not. For example, a 5% interest rate compounded monthly yields ~5.12% APY. Always compare APY — it tells you what you actually earn.
Are CDs FDIC insured?
Yes. CDs from FDIC-insured banks are protected up to $250,000 per depositor, per bank. NCUA insures credit union CDs for the same amount.
Is a CD a good investment right now?
CDs are a good fit if you have cash you won’t need for a set period and want a guaranteed, risk-free return. They are not ideal for money you might need on short notice, or for growth that outpaces inflation over decades. Compare CD rates to high-yield savings accounts and Treasury bonds to find the best option for your timeline.
What is the minimum deposit for a CD?
Minimum deposits vary by bank. Many online banks and credit unions offer CDs with no minimum or as little as $500. Traditional banks may require $1,000–$2,500. Jumbo CDs, which offer higher rates, typically require $100,000 or more. Always check the specific bank’s requirements before opening an account.
How is CD interest taxed?
CD interest is taxed as ordinary income at your federal marginal tax rate, plus state income tax where applicable. Interest is taxable in the year it is credited to your account — even if you leave it in the CD. For an estimate of your after-tax return, use the After-Tax Earnings calculator on this page.
How do I calculate CD interest?
Use the compound interest formula: FV = P × (1 + r/n)^(n×t), where P is your deposit, r is the annual rate, n is the number of compounding periods per year, and t is the term in years. Or use the CD interest calculator at the top of this page for instant results across every term.
What is a good CD rate?
As of mid-2026, a good CD rate is roughly 4.00–5.50% APY. Online banks typically offer higher CD rates than traditional brick-and-mortar banks. Always compare the APY, not just the stated interest rate, since APY reflects the true annual return including compounding.
How is CD APY calculated?
APY = (1 + r/n)^n − 1, where r is the annual interest rate and n is the number of compounding periods per year. More frequent compounding yields a slightly higher APY: daily compounding produces a marginally higher APY than monthly or quarterly.
How much does a CD earn?
A $10,000 CD at 4.35% APY earns about $435 in one year. Your actual return depends on the deposit amount, the rate, the term, and the compounding frequency. Use the CD calculator above to see exact earnings for any scenario.
What is the early withdrawal penalty on a CD?
Most banks charge a penalty of several months’ interest if you withdraw before maturity — commonly 90 days of interest for terms under one year, 180 days for one-to-five-year terms, and 365 days for terms over five years. Use the Early Withdrawal Penalty calculator (Annex A above) to see the exact cost for your CD.