CD Calculator
Calculate Certificate of Deposit earnings with compound interest
Balance Growth Over Time
CD Calculator Formula
This calculator uses the standard compound interest formula:
- A = Final amount at maturity
- P = Principal (initial deposit)
- r = Annual interest rate as a decimal (e.g., 5% = 0.05)
- n = Times compounded per year (daily=365, monthly=12)
- t = Time in years
Example: $10,000 at 5% APY for 12 months (monthly compounding): A = 10,000 × (1 + 0.05/12)^12 = $10,511.62
Fixed rate advantage: Unlike savings accounts, CDs carry fixed APYs — your rate stays the same for the entire term, so you know your exact earnings upfront.
Current CD Rates — 2026
APYs have been trending downward since the Fed started cutting rates in 2024. Locking in a competitive rate now could be beneficial if rates continue to fall.
| CD Term | Competitive APY | National Avg |
|---|---|---|
| 3-month CD | 4.50%–5.00% | 0.44% |
| 6-month CD | 4.70%–5.20% | 0.52% |
| 12-month CD | 4.80%–5.50% | 0.61% |
| 18-month CD | 4.50%–5.10% | 0.53% |
| 24-month CD | 4.20%–5.00% | 0.48% |
| 36-month CD | 4.00%–4.80% | 0.42% |
| 60-month CD | 3.80%–4.60% | 0.38% |
Online banks and credit unions consistently offer 4–10× higher CD rates than national brick-and-mortar banks. Always compare APY — not just the stated interest rate.
Factors That Affect Your CD Earnings
- Initial deposit: Standard CDs only allow one deposit — at opening. The higher your deposit, the more interest you earn.
- APY: Higher APY = more earnings. Online banks typically offer 2–4× higher rates than brick-and-mortar banks.
- Term length: Longer terms give more time for interest to compound. However, you may miss rate increases if rates rise during your term.
- Compounding frequency: Daily compounding earns slightly more than monthly or quarterly, since interest earns interest sooner.
- Early withdrawal penalty: Withdrawing before maturity triggers a penalty — typically 3–12 months of interest — which can eat into your principal.
Common CD Calculator Mistakes to Avoid
- Confusing APY and APR — APY already includes compounding. APR does not. Always compare APY to APY across banks.
- Ignoring compounding frequency — daily compounding earns slightly more than monthly. Over long terms the difference adds up.
- Forgetting early withdrawal penalties — most CDs charge 3–6 months of interest if you withdraw early. Factor this into your decision.
- Locking all cash into one CD — CD laddering (multiple CDs with different terms) gives better flexibility and rate exposure.
Frequently Asked Questions
What is a Certificate of Deposit (CD)?
A CD is a savings account that holds a fixed amount of money for a fixed period (the term) and earns a fixed interest rate. In exchange for leaving your money untouched, banks pay a higher APY than standard savings accounts.
What is the difference between APY and APR on a CD?
APY (Annual Percentage Yield) accounts for compounding and reflects your actual annual return. APR does not include compounding. CDs are quoted in APY — always compare APY, not APR.
What is a good CD interest rate in 2026?
Competitive 12-month CDs in 2026 offer 4.8%–5.5% APY at online banks. The national average is about 0.61%. Anything above 4.5% APY is currently considered a strong rate.
Can I add money to a CD after opening?
Standard CDs don't allow additional deposits. Some banks offer "add-on CDs" that permit deposits during the term — but these usually offer slightly lower rates than standard CDs.
What happens if I withdraw from a CD early?
Early withdrawal triggers a penalty — typically 3–6 months of interest for short-term CDs, up to 12 months for longer terms. This can reduce or eliminate your earnings, and in rare cases dip into your principal.
What is CD laddering?
CD laddering means splitting your deposit across multiple CDs with different maturity dates — e.g., 3-month, 6-month, 1-year. This gives you regular access to funds while earning better rates than a savings account, and lets you reinvest at current rates as each CD matures.