CD Calculator: How Much Interest Will Your CD Earn?
Calculate the interest and maturity value of a certificate of deposit from the deposit, APY or interest rate, compounding and term, and see what an early withdrawal would cost.
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Key takeaways
- $10,000 in a 12-month CD at 4.00% APY earns $400; over five years at the same APY it earns about $2,167.
- The FDIC national averages on September 21, 2026 were 1.73% for 12-month CDs and 1.38% for 60-month CDs, far below competitive offers.
- Compare CDs by APY. An interest rate of 3.92% compounded daily equals about 4.00% APY.
- Early withdrawal penalties are usually a set number of months of interest; on $10,000 at 4% APY, three months is about $99.
A certificate of deposit pays a fixed rate in exchange for leaving your money with the bank for a set term. Because the rate is locked, you can calculate exactly what a CD will be worth on the day it matures. Enter the deposit, the rate and the term below; if the bank quotes an interest rate rather than an APY, choose that option and the compounding frequency, and the calculator converts it.
CD calculator
Assumes interest stays in the CD until maturity. Interest is taxable each year it is credited, even before the CD matures.
How CD interest is calculated
When the APY is known, the balance at maturity is:
Balance = Deposit × (1 + APY)months ÷ 12
If you have only the interest rate (sometimes called the dividend rate at credit unions) and the compounding frequency, the APY is (1 + rate ÷ n)n − 1, where n is the number of compounding periods per year. Federal Truth in Savings rules require banks to disclose the APY, so it is usually on the rate sheet next to the interest rate.
The calculator assumes interest stays in the CD and compounds until maturity. Some banks let you have interest paid out monthly or to another account; in that case it does not compound and you earn slightly less.
Example: $10,000 in different CDs
| CD | APY | Interest earned | Value at maturity |
|---|---|---|---|
| 3 months | 4.00% | $98.53 | $10,098.53 |
| 6 months | 4.20% | $207.84 | $10,207.84 |
| 12 months | 4.00% | $400.00 | $10,400.00 |
| 12 months at the national average | 1.73% | $173.00 | $10,173.00 |
| 60 months | 4.00% | $2,166.53 | $12,166.53 |
| 60 months at the national average | 1.38% | $709.31 | $10,709.31 |
The national averages come from the FDIC's monthly survey of September 21, 2026. They include many large banks that pay little on deposits; online banks and credit unions often pay more than twice as much. The example rates of 4.00% and 4.20% are illustrations, not quotes; check current offers before you open a CD.
APY vs. interest rate
The interest rate is the base rate; the APY adds the effect of compounding over a year. A CD with a 3.92% interest rate compounded daily has an APY of about 4.00%; compounded monthly, about 3.99%. When two banks quote the same interest rate with different compounding, the APY tells you which pays more. When they quote APYs, you can compare directly.
Early withdrawal penalties
Most CDs charge a penalty if you take money out before maturity. It is usually expressed as interest for a period, often around three months for terms of a year or less and six months to a year or more for longer CDs, but every bank sets its own schedule. On $10,000 at 4.00% APY:
- 3 months of interest: about $99
- 6 months of interest: about $198
If you withdraw early in the term, the penalty can exceed the interest earned so far and reduce your principal. Federal Regulation D requires a penalty of at least seven days' simple interest for withdrawals within the first six days after deposit; beyond that, the amount is the bank's choice and must be disclosed before you open the account. If you might need the money, a no-penalty CD or a high-yield savings account gives you access, and a CD ladder spreads maturities so part of your money is always close to coming due.
Taxes on CD interest
CD interest is taxed as ordinary income. For CDs of one year or less, it is generally taxed in the year it is credited or paid. For CDs longer than a year that pay all interest at maturity, the IRS original issue discount rules usually require you to report part of the interest each year, even before you receive it. Your bank reports it on Form 1099-INT or 1099-OID. CDs held in an IRA grow tax-deferred instead. More on reporting in is savings interest taxable.
Is a CD the right choice?
A CD makes sense when you know you will not need the money before a specific date and you want to lock in today's rate, for example for a planned purchase in 12 to 24 months or for part of a retirement cash reserve. If rates might rise or you value flexibility, a high-yield savings account keeps your options open; the trade-offs are laid out in CD vs. high-yield savings account. For the basics of terms and how banks set CD rates, see fixed-term deposits and CDs explained. Bank CDs are FDIC insured up to $250,000 per depositor, per bank, per ownership category.
Frequently asked questions
How much interest does a $10,000 CD earn in a year?
At 4.00% APY, $400. At the 1.73% national average for 12-month CDs, $173.
Is CD interest compounded?
Usually daily or monthly, with interest credited monthly or quarterly. The APY already includes compounding, so a CD with a higher APY always pays more over a year.
What happens when a CD matures?
You get a grace period, often 7 to 10 days, to withdraw the money or change the term. If you do nothing, many banks renew the CD for the same term at the current rate, which may be lower.
Can you lose money in a CD?
Not in an FDIC-insured bank CD held to maturity, up to the insurance limit. You can lose some interest, and in rare cases some principal, if you withdraw early and pay a penalty.
Are CD rates fixed?
Standard CDs have a fixed rate for the full term. Some specialty CDs, such as bump-up or step-up CDs, can change; they usually start with a lower rate.
