Certificate of Deposit - CD Interest Calculator

Calculate the earnings on your investment

Use this free and simple CD interest calculator to find out how much interest will be earned on a certificate of deposit (CD). Just enter a couple of pieces of information and this CD calculator will calculate the annual percentage yield (APY) and your ending balance.



Term Return Your Balance

CD Interest Calculator Definitions


The amount you invest to open your CD account.


The total duration, measured in months, until your CD matures.

Annual Percentage Yield (APY)

The effective annual interest rate earned on your CD.

Frequently Asked Questions About Certificates of Deposit

1. What is an interest rate?

The stated interest rate applied to your CD, not to be confused with the Annual Percentage Yield (APY). Please note that future interest CD rate fluctuations are unpredictable.

2. How do you define compounding interest?

The process by which your CD earns interest on the accumulated interest. This calculator allows you to select the frequency at which the interest income is added to your account.

More frequent compounding leads to earlier generation of additional interest. To determine the compounding frequency for your specific CD, contact your financial institution.

3. How do you calculate annual percentage yield?

The Annual Percentage Yield (APY) is computed using the formula: APY = (1 + r/n)^n - 1. Here, "r" represents the stated annual interest rate, and "n" denotes the number of compounding periods per year.

4. How much interest can you earn on a Certificate of Deposit?

The amount of interest you can earn on a CD depends on the APY, the CD's term length, and the frequency of compounding. Higher compounding frequencies lead to more significant growth over time. Typically, CDs compound either daily or monthly. 

If you use our CD interest calculator, you'll see how much compounding interest can increase your balance. 

5. Do CDs pay daily, monthly, or yearly?

The interest payment frequency for CDs may differ based on the specific account. However, most CDs credit interest on a monthly basis. Some institutions may offer the option to transfer interest to another account, such as a savings or money market account.

The frequency of compounding also plays a role, with CDs usually compounding daily or monthly. Frequent compounding accelerates your savings' growth.

6. What's the minimum deposit for a CD?

The minimum deposit required to open a CD varies depending on the account and the financial institution's policies. Different accounts may have different minimum deposit requirements. Depending on your financial instituation, you could start for as little as $100.

7. How are CDs difference from savings and money market accounts?

CDs have fixed terms ranging from one month to several years, whereas savings accounts and money market accounts are more liquid, allowing access to funds at any time.

The deposit calculator above is specically for CD accounts.

Savings and money market accounts may offer transactional options such as ATM access and wire transfers, which are typically not available for CDs.

Early withdrawal from a CD before its maturity date may incur penalties, and CD withdrawal options are usually limited to cash withdrawal or transfers to other accounts.

8. Do CD interest rates change?

Yes, CD interest rates can change over time. Unlike fixed-rate CDs, which lock in a specific interest cd rate for the entire term, variable-rate CDs may have their interest rates adjusted periodically based on market conditions or the bank's policies.

9. Do CD interest rates compound monthly?

CD interest rates can compound at different frequencies, depending on the terms of the CD and the bank's policies. Some CDs compound interest monthly, while others may compound quarterly, semi-annually, or annually.

10. Do CD interest rates go up in a recession?

Generally, CD interest rates can be influenced by economic conditions, including recessions. In times of economic downturn, interest CD rates on many types of investments, including CDs, may decrease as central banks aim to stimulate borrowing and spending.

11. Do CD interest rates pay monthly?

The interest payment frequency for CDs can vary depending on the terms of the CD and the bank's policies. Some CDs may pay interest monthly, while others pay interest quarterly, semi-annually, or upon maturity.

12. How do CD interest rates work?

CD interest rates work by providing a fixed or variable return on the amount of money deposited into the CD for a specified period (the CD term). The bank pays the interest at regular intervals, according to the terms of the CD agreement.

13. Is CD interest rate fixed?

Some CDs offer fixed interest rates, meaning the rate remains constant throughout the CD's term. Other CDs may have variable interest rates that can change over time.

14. Why are CD interest rates going up?

CD interest rates may go up due to various factors, including changes in the overall interest rate environment, improvements in the economy, or increased demand for CDs as an investment option.

15. Why do CDs have higher interest rates?

CDs typically offer higher interest rates compared to standard savings accounts because they require the depositor to lock in their money for a specific term. The financial institutions can then use these funds for longer-term investments, allowing them to offer higher interest rates.

Disclaimer: Educational Information Only

The information provided on this website is for educational purposes only. We want to emphasize that each individual's financial situation is unique.. We do not provide expert financial advice, advisory or brokerage services, and we do not recommend or advise individuals to buy or sell specific stocks or securities. Please be aware that performance information may have changed since the time of publication, and past performance is not indicative of future results.