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Certificate of Deposit Calculator

Enter your deposit, rate, term and compounding to see what your CD pays at maturity.

How it is calculated

The tool compounds the deposit at a fixed rate: maturity = deposit × (1 + r ÷ n)n × t, where r is the annual rate as a decimal, n is the compounding periods per year (12 monthly, 4 quarterly, 365 daily) and t = term_months ÷ 12. interest = maturity − deposit. After-tax interest is interest × (1 − tax_rate ÷ 100). The effective yield is ((1 + r ÷ n)n − 1) × 100, which is what an APY figure represents. The maturity value shown is before tax; only the interest line is reduced by tax. A tax rate of 100 or more gives no result. Early withdrawal penalties, fees and renewals are not modelled.

Worked example

You deposit 20,000 for 18 months at 4.5%, compounded monthly, and pay tax at 22% on the interest. Monthly rate: 4.5% ÷ 12 = 0.375%. Over 18 months: 20,000 × 1.0037518 = $21,393.90 at maturity. Interest earned: 21,393.90 − 20,000 = $1,393.90. After tax: 1,393.90 × 0.78 = $1,087.25. The effective yield is 4.59%, slightly above the stated 4.5% because the interest is credited monthly and earns interest itself.

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Common mistakes

  • Entering the term in years. The field is months, so a 2-year CD is 24, and typing 2 would give a two-month result.
  • Comparing a stated rate with an APY. A CD quoted at 4.5% compounded monthly has a higher yield than 4.5%, so compare products using the effective yield line.
  • Reading the maturity value as what you keep after tax. Tax is only deducted in the after-tax interest line, so your net total is the deposit plus that figure.
  • Entering the tax rate as 0.22. The field is a percent (22), and a decimal would assume nearly no tax.
  • Ignoring an early withdrawal penalty when you may need the money. The tool assumes you hold the CD to maturity.

Sources

About this calculator

A certificate of deposit (CD) pays a fixed interest rate in exchange for locking up a deposit for a set term, and its maturity value depends on the compounding frequency: Maturity Value = Principal x (1 + r/n)^(n x t), where r is the annual rate, n is the number of compounding periods per year, and t is the term in years. The difference between maturity value and principal is the interest earned.

Savers use CDs when they want a guaranteed, FDIC-insured return that’s higher than a standard savings account, in exchange for giving up access to the money before the term ends (early withdrawal typically triggers a penalty of several months’ interest). Because CD interest is taxable as ordinary income in the year it’s earned or credited — even if you don’t withdraw it — the after-tax return is meaningfully lower than the stated rate for anyone in a higher tax bracket, which is why comparing CDs against high-yield savings and treasury bills usually needs to be done on an after-tax basis.

Deposit, rate, term and how often interest compounds give the value at maturity, the interest earned and what you keep after tax.

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