CD calculator (certificate of deposit)

How a CD's maturity value is figured

A certificate of deposit pays a fixed rate for a fixed term in return for you leaving the money untouched. Because the rate is quoted as an APY — the effective annual yield with compounding already included — the maturity value is just the deposit grown by that APY over the term: deposit × (1 + APY) raised to the term in years. A $10,000 deposit in an 18-month CD at 5% APY therefore grows to 10,000 × 1.05^1.5, a little over $10,759. There are no monthly contributions to a standard CD; you fund it once and collect principal plus interest at maturity, which is why the only inputs here are the deposit, the APY, and the term.

The trade: certainty for liquidity

A CD's appeal is that the rate is locked. While a high-yield savings rate can be cut the day after you open it, a CD guarantees the quoted yield for the whole term — valuable when rates look likely to fall. The cost is access: pull the money out early and you typically forfeit several months of interest as a penalty, occasionally eating into principal. So a CD suits money with a known horizon you are confident you will not touch. If you might need the cash sooner, a high-yield savings account keeps it liquid at a variable rate instead.

Laddering and the fine print

A common way to soften the liquidity trade-off is a CD ladder — split the money across several CDs maturing at staggered dates, so a portion comes due regularly while the rest stays locked at higher long-term rates. When comparing offers, make sure each is quoted as APY rather than a nominal rate; the APY calculator puts mismatched quotes on equal footing. The projection here assumes the CD is held to maturity and ignores the early-withdrawal penalty and tax, both of which reduce the real return.

Educational tool only — not financial advice. Assumes the CD is held to maturity; interest is generally taxable. Figures are estimates.