How to use this calculator
- Enter or choose deposit.
- Enter or choose rate.
- Enter or choose rate quoted as.
- Enter or choose term.
- Enter or choose tax rate on interest.
- The value at maturity updates as you type. Use Copy result or Share to keep it.
Method
APY = (1 + APR ÷ k)^k − 1; Value at maturity = Deposit × (1 + APY)^(months ÷ 12)
- APR
- nominal annual rate
- k
- compounding periods per year
- APY
- annual percentage yield (effective annual rate)
Worked example
- APY = (1 + 0.05 ÷ 12)^12 − 1 = 5.116%.
- Value = 10,000 × 1.05116 = 10,511.62 after 12 months.
A $10,000 one-year CD at 5% APR compounded monthly (5.116% APY) matures at $10,511.62.
What the result means
Compare CDs by APY, which already includes compounding. Before locking money in, check the early-withdrawal penalty: it is often several months of interest.
Assumptions and limits
- Interest is left in the CD and compounds until maturity.
- For terms that are not whole compounding periods, interest is pro-rated using the APY.
- Tax, if entered, is a flat rate on the interest.
- Early-withdrawal penalties are not modelled.
- Some CDs pay interest out instead of compounding it, which earns slightly less.
Questions
What is the difference between APY and APR?
APR is the nominal rate before compounding. APY includes the effect of compounding over a year, so it is the better figure for comparing accounts.
Are CDs insured?
In the US, CDs at FDIC-insured banks and NCUA-insured credit unions are covered up to the insurance limits. Check the institution’s status before you deposit.
Sources
Please note: This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ.