CD Earnings Calculator
Estimate the final balance and effective annual rate for your Certificate of Deposit.
Additional Information and Definitions
Principal Amount
The starting amount you plan to invest into the CD. More principal typically leads to higher overall returns.
Annual Yield (%)
The yearly interest rate offered by the CD. Higher rates yield more growth over time.
Term (months)
How many months the CD will be held. Typically ranges from 3 to 60 months for many banks.
Compounding Frequency
How often the interest compounds. More frequent compounding can boost returns slightly.
Grow Your Savings with CDs
Compare different compounding frequencies to see the best approach.
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CD Earnings Calculator
Estimate the final balance and effective annual rate for your Certificate of Deposit.
Understanding CD Terms
Explore the core concepts related to Certificate of Deposit investments.
Principal Amount:
The initial deposit placed into the CD. It forms the basis on which interest is calculated.
Compounding Frequency:
Determines how often the earned interest is added back to the balance, thus boosting subsequent interest calculations.
Annual Yield:
The interest rate offered by the CD for one year, not yet accounting for compounding frequency.
Effective Annual Rate:
The annualized rate that includes compounding effects, showing the real growth in one year.
5 Fascinating Facts About Certificates of Deposit
A CD can be a reliable part of your savings strategy. Check out these interesting tidbits that might surprise you.
1.Steady Returns, Low Risk
CDs offer predictable yields with minimal risk compared to stocks. They are insured up to certain limits by government entities in many countries.
2.Breaking Early Has Consequences
Withdraw your money before maturity and you could face penalties that eat into your earnings.
3.Longer Terms Often Yield Higher Rates
Banks incentivize you to lock in funds for longer, typically offering higher annual yields for extended terms.
4.Ladder Strategy
Some savers use CD ladders—staggered maturity dates—to access funds periodically while still earning higher rates.
5.No Secret Fees
CDs often have fewer fees than some investment vehicles. Just watch out for early withdrawal penalties and you're good to go.