CD Calculator
See what a certificate of deposit earns by maturity at its APY, and what withdrawing early costs in penalty.
= 4.4020% APR compounded daily
1 to 120 months
The term counts as 365 days. APY from these figures: 100 × ((1 + 450.00 ÷ 10,000.00)^(365 ÷ 365) − 1) = 4.50%
Early withdrawal
Works out what a certificate of deposit (CD) earns at its APY over a term in months or days, with the interest left to compound or paid out each month. It checks the result back to the APY with the formula US banks must use, and shows what withdrawing early costs: the penalty, what you get back, the yield you end up with, and whether moving the money to a better CD pays.
How to use it
- Interest rate — the APY the bank quotes, or with APR a rate and its compounding, as some credit unions quote them.
- Term — 1 to 120 months, or 7 to 3,650 days. Months count as months × 365 ÷ 12 days to the nearest day: whole years exactly, other terms about as long as the calendar months (6 months is 183 days).
- Interest — compounded in the CD, or paid out monthly. Paid out, the balance stays at the deposit and the rate entered is simple interest.
- Early withdrawal — switched on, the penalty in days or months of interest on the deposit, and after how many months the whole balance is withdrawn. Enter a new CD's APY to compare moving the money for the months left against staying.
How it works
An APY already includes compounding, so a deposit P grows to P × (1 + APY)^(days ÷ 365). Over 365 days the interest is exactly the deposit times the APY. A rate that compounds daily grows the same way by its APY. One that compounds monthly, quarterly or yearly earns whole periods over a term in months, as the bank credits them: $ 10,000.00 for 6 months at 5% compounded monthly earns $ 252.62, the deposit × ((1 + 0.05 ÷ 12)^6 − 1). A term in days counts the days.
Penalties are usually stated as days or months of simple interest at the CD's interest rate (the rate before compounding, a little below the APY; from an APY, the calculator assumes daily compounding) on the principal withdrawn. With the whole CD withdrawn, that is the deposit: interest already earned adds nothing to the penalty. A penalty bigger than the interest earned so far comes out of the deposit.
Interest = P × ((1 + APY)^(d ÷ 365) − 1)
APY = 100 × ((1 + interest ÷ P)^(365 ÷ d) − 1)
Penalty = P × r × N ÷ 365 (N days) or P × r × N ÷ 12 (N months)
P = deposit, d = days in the term, r = interest rate
Examples
A 12-month CD: 10,000 at 4.5% APY
It earns $ 450.00, so it matures at $ 10,450.00. The bank's interest rate behind that APY, compounded daily, is 4.4020%.
Breaking a 5-year CD at month 18
10,000 at 4.5% APY for 60 months, with a penalty of 12 months' interest, withdrawn after 18 months: the balance is then $ 10,683.18, the penalty is $ 440.20, and you get back $ 10,242.98, a yield of 1.61% a year. Kept to maturity it pays $ 12,461.82. Moved to a new CD at 5.5% APY for the 42 months left, the money comes to $ 12,353.16; breaking pays only above 5.76% APY.
Interest paid out monthly
The same 10,000 for 5 years at a 4.5% rate, with Paid out monthly, pays $ 37.50 a month on average, $ 2,250.00 in all, and the balance stays at 10,000. Left to compound at 4.5% APY it would earn $ 2,461.82.
Interest on 10,000 by APY and term
| APY | 3 months | 6 months | 12 months | 24 months | 60 months |
|---|---|---|---|---|---|
| 3.00% | $ 73.97 | $ 149.30 | $ 300.00 | $ 609.00 | $ 1,592.74 |
| 3.50% | $ 86.14 | $ 173.97 | $ 350.00 | $ 712.25 | $ 1,876.86 |
| 4.00% | $ 98.26 | $ 198.59 | $ 400.00 | $ 816.00 | $ 2,166.53 |
| 4.50% | $ 110.35 | $ 223.14 | $ 450.00 | $ 920.25 | $ 2,461.82 |
| 5.00% | $ 122.38 | $ 247.64 | $ 500.00 | $ 1,025.00 | $ 2,762.82 |
Rules and sources
The APY. Regulation DD (Truth in Savings) defines it as 100 × ((1 + interest ÷ principal)^(365 ÷ days in term) − 1), with all interest assumed to stay on deposit. For a term in months a bank may use the actual days or the days of any run of that many calendar months, as long as the interest uses the same count. A CD of over a year that does not compound and pays its interest out at least once a year may disclose its APY as equal to its rate.
Disclosures. Before opening, a bank must state the rate and APY, how often interest compounds and is credited, the maturity date, and whether a penalty applies for early withdrawal, how it is worked out and when it is charged.
The penalty. Its size is set by your bank. The one legal minimum comes from Regulation D: money withdrawn within six days of the deposit forfeits at least 7 days' simple interest, which the calculator applies to a withdrawal after 0 months.
Sources
- 12 CFR Appendix A to Part 1030, Annual Percentage Yield Calculation — eCFR
- 12 CFR 1030.4, Account disclosures — eCFR
- 12 CFR 204.2, Definitions (time deposit) — eCFR
- Understanding deposit insurance — Federal Deposit Insurance Corporation
Reviewed
Frequently asked questions
See also
- Savings Calculator — for a savings account with regular deposits.
- FD Calculator — for an Indian fixed deposit, with its own compounding rules.
- Investment Calculator — for growth at an investment return.