CD Rate Calculator to Calculate
Certificate of Deposit Interest and APY

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Explains what a Certificate of Deposit (CD) is, and helps you to determine a CD's future value at maturity.

This free online CD Rate Calculator will calculate a certificate of deposit interest and annual percentage yield (APY).

Plus, unlike some online certificate of deposit calculators, the certificate of deposit interest calculator on this page will even allow you to set the compounding interval to match the interval of the CD you are calculating interest for.

This page also includes a brief description of certificates of deposit along with a link to an unbiased source for more in-depth study.

What is a CD?

A CD (Certificate of Deposit) is similar to a regular savings account in that your funds are federally insured against loss (up to as much as $250,000). But unlike a regular savings account, when you deposit money into a CD you agree to leave the deposit untouched for a specified length of time -- usually stated in number of months.

In exchange for this agreement you will normally earn a higher rate of interest on certificates of deposit than you would on a regular savings account. And the longer you agree to leave the CD untouched, the higher the interest rate you can expect to earn.

How Long Must I Agree To Leave the CD Untouched?

The length of time you agree to leave the certificate untouched is up to you. You can usually choose any number of months between 1 and 120 months. However, regardless of which length of time you choose, if you withdraw the CD before it matures you may be assessed an early withdrawal penalty, or end up forfeiting some or all of your interest earnings. And if that happens, you might have been better off depositing the funds into a regular savings account, since a smaller interest rate is better than no interest earnings at all.

Is Investing in CD's Complicated?

Not at all. Investing in a CD is perhaps the easiest of all investments -- which makes them one of my personal favorites. But of course, like any other type of investment, the savings institutions are working hard to complicate certificates of deposit to the point of needing an investment advisor to guide you. You can now choose between fixed, variable, and special feature CDs. Variable CDs allow savings institutions to entice CD investors in with higher interest rates, leaving the door open to lower the rates later.

Where Can I Purchase a CD?

While most people purchase certificates of deposit from banks, which is the usually the safest way to purchase them, you can also purchase CDs from "Deposit Brokers." Deposit brokers can offer higher interest rates on brokered CDs because they negotiate bulk-purchase deals with institutions in exchange for bringing in a large group of CD investors. However, as with any other type of investments, higher rates of returns usually comes with higher risk, so be sure to do your homework before making the purchase.

Where can I Get Unbiased Information?

For an in-depth, unbiased description of certificates of deposit, be sure to check out the U.S. Securities and Exchange Commission's report titled, "High-Yield CDs: Protect Your Money By Checking the Fine Print."

With that, let's use the CD Rate Calculator to calculate a certificate of deposit interest and annual percentage yield.

CD Rate Calculator
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Instructions: Enter the amount of the certificate of deposit, the annual percentage rate (APR), and the number of months before the CD matures.

Next, select the compounding interval of the CD and then click the "Calculate a Certificate of Deposit Interest and APY" button.

Mouse over the blue question marks for a further explanation of each entry field. More in-depth explanations can be found in the glossary of terms located beneath the CD Rate Calculator.

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Help Enter the certificate of deposit amount ($):
Help Enter the annual interest rate (%):
Help Enter the number of months (#):
Help Compounding interval:
Help Future value:
Help Interest earned:
Help Annual percentage yield (APY):
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CD Rate Calculator Glossary of Terms

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Certificate of deposit amount: The deposit amount of the CD. Most certificates of deposit require a minimum deposit amount of $500 or more.

Annual interest rate: The annual interest rate (APR) of the CD. Enter as a percentage (for .02, enter 2%). Note that this is not the same as annual percentage yield (APY).

Number of months: The number of months before the CD reaches its maturity date. If you have a 12-month CD, then the maturity date will be roughly 12-months from the date of purchase.

Compounding interval: The frequency of interest compounding that applies to the certificate of deposit. Typically, the more frequent the compounding, the more interest you will earn with the rate and time frame being equal.

Future value: This how much your certificate of deposit will be worth when it reaches its maturity date -- which includes your original deposit amount plus the interest earned.

Interest earned: This is the amount of interest you can expect to earn on the CD between when it is purchased and when it matures.

Annual percentage yield: Given the number of months and interest rate, this is the annual percentage yield (APY) of the certificate of deposit. APY (also know as Effective Annual Rate, or EAR) is a formula used by investors to compare one quoted interest rate with another -- because savings institutions like to quote their interest rates in ways that make them appear higher than they actually are. The APY formula allows investors to compare apples to apples -- regardless of the method used to quote the rates. In case you wish to double check the results of the CD rate calculator, here is the formula for calculating APY:

APY = (1 + r/n )n – 1 where r is the quoted annual interest rate and n is the number of times the interest is compounded per year.

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