CD Calculator

A certificate of deposit (CD) trades liquidity for a fixed rate: you agree to leave a lump sum untouched for a set term, and the bank pays a stated rate compounded on a schedule. Because the rate is locked when you open the CD, it's a way to secure a yield even if rates later fall, at the cost of an early-withdrawal penalty if you need the money sooner.

Want to see the compounding math itself in more detail? Our compound interest calculator breaks down exactly how a balance grows month by month, outside the context of any one product.

This calculator grows your deposit to maturity, shows the total interest and effective APY, and restates the result in today's dollars so you can see the real, inflation-adjusted return.

How does this calculator work?

Enter your deposit, the interest rate, the term, and how often interest compounds. The calculator grows your balance and shows the maturity value and total interest earned.

More frequent compounding (daily vs. annually) raises your effective yield (APY) slightly, even at the same nominal rate.

Enter your inflation and marginal tax rates to see the after-tax, inflation-adjusted (real) value alongside the headline maturity value.

Worked example

Suppose you deposit $10,000 in a 5-year CD at 4.5%, compounded monthly, with 3% inflation and a 24% tax rate.

Deposit

$10,000

Rate / term

4.5% / 5 yrs

APY (monthly compounding)

4.59%

Maturity value

$12,518

Total interest

$2,518

Real (inflation-adjusted)

$10,798

How the numbers work

The APY comes from compounding the 4.5% nominal rate monthly: (1 + 0.045/12)^12 − 1 = 4.59%.

Growing the $10,000 at that yield for five years gives $10,000 × (1 + 0.045/12)^60 = $12,518, so the interest earned is $2,518.

To find the real value, that maturity figure is discounted by five years of 3% inflation: $12,518 ÷ 1.03^5 = $10,798, barely ahead of where you started in purchasing-power terms, and that's before the yearly tax on the interest.

The CD grows to $12,518 before tax. But after 3% annual inflation, its purchasing power is $10,798 in today's dollars, and CD interest is taxed as ordinary income each year, trimming the real gain further.

That gap between nominal and real return is the key thing CDs hide: a 4.5% rate barely outpaces inflation after taxes, which is why CDs suit safety and short horizons more than long-term growth.

Rate vs. APY, and why compounding frequency matters

The stated interest rate is the nominal rate; the APY is what you actually earn once compounding is factored in. Because interest earns interest, more frequent compounding lifts the APY slightly above the nominal rate: at 5%, daily compounding yields 5.13% APY versus 5.00% compounded annually. When comparing CDs, compare APY to APY, since two banks can quote the same nominal rate but compound differently.

CD laddering

A CD ladder spreads your money across staggered CD maturities: say, 1-, 2-, 3-, 4-, and 5-year terms. As each shorter CD matures, you reinvest it at the longest rung. This gives you regular access to a portion of your cash while still capturing the higher rates that longer terms usually pay, and it smooths out the risk of locking everything in right before rates rise.