CD Calculator (Certificate of Deposit)

A CD is a time-deposit account at a bank or credit union. You agree to leave a fixed amount of money on deposit for a fixed term (usually 3 months to 5 years) in exchange for a guaranteed interest rate that is typically higher than a regular savings account. Your funds are locked until the maturity date; pulling money out early triggers an early-withdrawal penalty. CDs at US banks are insured by the FDIC and at credit unions by the NCUA, so the principal is safe as long as you stay under the coverage limit.

APR (Annual Percentage Rate) is the plain annual interest rate before compounding. APY (Annual Percentage Yield) is the actual yearly return after compounding is factored in. APY is always equal to or higher than APR, because reinvested interest earns more interest. US banks are required by Regulation DD to advertise CDs in APY, which is the number you should compare across offers. This calculator treats the input as the nominal APY the bank advertises and back-solves the periodic compound rate from it.

A CD ladder splits one large deposit across multiple CDs with staggered maturity dates. A common 5-year ladder puts equal amounts into a 1-year, 2-year, 3-year, 4-year, and 5-year CD. Each year one CD matures and you roll it into a new 5-year CD at whatever the current rate is. The ladder keeps a portion of your money available every 12 months without paying penalties, while still earning the higher rates that longer-term CDs offer. It also smooths out interest-rate risk: you are not locked in at a single rate at a single point in time.

Yes. CDs at FDIC-insured US banks are protected up to $250,000 per depositor, per insured bank, per ownership category. The same coverage applies at NCUA-insured credit unions. If you have more than $250,000 to deposit, split it across separate banks or different ownership categories (individual, joint, trust) to stay fully insured. Brokered CDs are also covered, but only by the underlying issuing bank, so always verify the bank behind a brokered offering before stacking deposits.

The penalty depends on the term. A typical US bank charges 90 days of interest for CDs of 12 months or less, 180 days for 13 to 60 months, and 365 days for longer terms. If you withdraw before enough interest has accrued, some banks will dip into your principal to satisfy the penalty, leaving you with less than you deposited. Before locking in a long term, run the numbers: a higher rate on a 5-year CD only beats a 1-year CD if you actually hold it through maturity, and the penalty estimate in this calculator gives you a quick read on the worst case if rates rise and you want out.