Financial Tool

CD Calculator

Calculate the final balance and interest earned on a Certificate of Deposit (CD).

Σ The Formula

A = P(1 + r/n)^(nt)

Real World Examples

Standard CD
$10,000, 4% rate, 1yr, Monthly Compound → $10,407.42
Long Term
$50,000, 5% rate, 5yr, Daily Compound → $64,201.27

# About This Calculator

A Certificate of Deposit (CD) is a low-risk savings tool that can boost your interest earnings compared to a standard savings account. In exchange for leaving your money untouched for a fixed term, the bank typically pays a higher interest rate.

Smart Strategy: CD Laddering

Instead of locking all your money in one 5-year CD, you can split it into five CDs maturing in 1, 2, 3, 4, and 5 years. As each one matures, you renew it into a new 5-year CD. This gives you regular access to some cash (liquidity) while still earning higher long-term rates.

Why Compounding Matters

This calculator handles Compound Interest, which is how most modern CDs operate. It factors in your initial deposit, the interest rate, and how frequently interest is added back to your balance (daily, monthly, or annually). Daily compounding yields slightly more than monthly.

Frequently Asked Questions

What is compounding frequency?+

It is how often the bank calculates your interest and adds it to your balance. The more frequent the compounding (e.g., daily vs. annually), the more interest you earn on your interest.

Can I withdraw money from a CD early?+

Usually, yes, but you will likely face an 'early withdrawal penalty,' which is often a set amount of interest (e.g., 90 days of interest). This calculator does not factor in penalties.

Are CD rates fixed?+

Yes. Unlike savings accounts where rates can fluctuate, a CD locks in your interest rate for the entire term. This protects you if national rates fall but means you miss out if rates rise.

Is money in a CD safe?+

In the United States, CDs at FDIC-insured banks (or NCUA-insured credit unions) are insured up to legal limits (typically $250,000 per depositor), making them virtually risk-free.

Is CD Calculator free to use?+

Yes, CD Calculator on Matheric is completely free to use. We believe in accessible education and utility for everyone.

How accurate is CD Calculator?+

We use standard mathematical formulas and high-precision computing algorithms to ensure results for CD Calculator are accurate for academic and professional use.

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