CD Calculator
A Certificate of Deposit (CD) is a fixed-term savings account where you deposit a lump sum for a set period (3 months to 5 years) at a fixed interest rate, higher than regular savings accounts because you commit to leaving the money untouched. This calculator shows the interest earned, maturity balance, and crucial after-tax return. Enter your deposit, the APY (Annual Percentage Yield), compounding frequency, and term in months. The tool computes total interest earned, then applies federal income tax at your marginal rate to show the after-tax interest (CD interest is ordinary income taxable in the year credited). A growth table shows your balance snapshots over the term. Key insight: CD interest is taxable, so a 4.5% APY might net only 3.5% after 22% federal tax, depending on your bracket. All deposits at FDIC-member banks are insured up to $250,000 per depositor, making CDs safe for conservative savers. Most CDs penalize early withdrawal; understand the terms before opening. Use this for emergency funds, medium-term goals, and predictable savings where market risk is unacceptable.
A $10,000 CD at 4.5% APY for 12 months earns -- in interest, giving a maturity balance of --. After 22% federal tax, you keep -- of that interest.
Growth table
Balance snapshots over the life of the CD. For terms over 12 months, figures are shown annually; for shorter terms, quarterly.
| Period | Balance | Interest earned to date |
|---|---|---|
| Enter values above to generate the table. | ||
How this CD calculator works
When you enter an APY, the calculator uses the standard compound interest formula treating APY as the effective annual rate. Because APY already incorporates the effect of compounding, the maturity value formula simplifies to:
A = P x (1 + APY/100)^(t/12)
Interest = A - P
After-tax interest = Interest x (1 - taxRate/100)
After-tax balance = P + After-tax interest
where P is the principal, APY is the annual percentage yield as a percentage, and t is the term in months. The compounding frequency selector calculates the equivalent APR and applies the standard formula A = P x (1 + APR/n)^(n x t/12), where n is the number of compounding periods per year. Both methods produce the same result when the inputs are consistent.
Worked example
$10,000 deposited for 12 months at 4.5% APY, federal tax rate 22%:
- A = 10,000 x (1 + 0.045)^1 = $10,450.00
- Interest = $10,450 - $10,000 = $450.00
- Federal tax = $450 x 0.22 = $99.00
- After-tax interest = $450 - $99 = $351.00
- After-tax balance = $10,000 + $351 = $10,351.00
Understanding CD rates: APY vs APR
Banks and credit unions are required by the Truth in Savings Act (12 C.F.R. Part 1030, implemented by the CFPB) to disclose the Annual Percentage Yield on deposit accounts. APY is the rate you actually earn over a year, accounting for the compounding schedule. APR is the base rate stated before compounding is applied.
For a CD compounding daily at 4.5% APR, the APY is approximately 4.603% (since daily compounding adds a small extra return each period). The difference grows with the rate and compounding frequency. When comparing CD offers from different banks, comparing APY directly gives a fair like-for-like comparison.
FDIC insurance and deposit limits
CDs held at FDIC-member banks are insured up to $250,000 per depositor, per insured bank, per ownership category. Ownership categories include: single accounts, joint accounts, IRAs and other retirement accounts, and trust accounts. Holding CDs in multiple categories at the same bank, or spreading deposits across multiple FDIC-member banks, can increase your total insured coverage. Credit union deposits are similarly insured by the National Credit Union Administration (NCUA) up to $250,000 per category.
If your total CD deposits at one institution approach or exceed $250,000, check the FDIC's Electronic Deposit Insurance Estimator (EDIE) at fdic.gov before adding funds.
Tax treatment of CD interest
Under IRS Topic 403, interest income from CDs is taxable as ordinary income in the year it is credited to your account or constructively received, which may be before the CD matures for multi-year CDs. Your bank will send a Form 1099-INT each tax year showing interest credited. The default 22% federal tax rate in this calculator corresponds to the 2025 bracket for single filers earning $47,150-$100,525; adjust the field to match your actual marginal rate.
CD calculator: frequently asked questions
What is a certificate of deposit (CD)?
A certificate of deposit is a savings product offered by banks and credit unions where you deposit a fixed sum for a set term at a fixed interest rate. In exchange for keeping the funds on deposit until maturity, the institution pays a higher rate than a standard savings account. The CFPB defines CDs and explains their features at consumerfinance.gov.
What is the difference between APY and APR on a CD?
APR (Annual Percentage Rate) is the stated interest rate before compounding is taken into account. APY (Annual Percentage Yield) reflects the actual return after compounding, and is therefore always equal to or higher than the APR. Consumers typically see APY advertised because it shows the true annual return. For a CD compounding daily at 4.5% APR, the APY is slightly above 4.5%. The CFPB requires institutions to disclose APY in marketing materials.
Is CD interest taxable?
Yes. Interest earned on a CD is treated as ordinary income by the IRS and is taxed at your marginal federal income tax rate in the year it is credited, even if the CD has not yet matured. You will receive a Form 1099-INT from your bank. State income tax treatment varies by state. See IRS Topic 403 at irs.gov for detail.
How much does FDIC insurance cover?
The Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks up to $250,000 per depositor, per insured bank, per ownership category. If you hold CDs at the same institution under the same ownership category that together exceed $250,000, the excess is not federally insured. Spreading deposits across different banks or using different ownership categories (individual, joint, IRA) can increase effective coverage. See fdic.gov for the full rules.
Can I withdraw from a CD before it matures?
Generally yes, but most CDs impose an early withdrawal penalty. The most common penalty is 90 to 180 days of interest, though some institutions charge more, especially on longer-term CDs. No-penalty CDs exist but typically offer lower rates. Always check the institution's specific terms before opening. The CFPB notes that some CDs automatically roll over at maturity; review the grace period terms to avoid unintended renewal.
Does compounding frequency matter on a CD?
Yes, but the effect is modest in practice. A CD compounding daily will earn slightly more than one compounding monthly at the same APR, because interest begins earning interest sooner. The difference on a $10,000 deposit at 4.5% over one year is roughly $2 between daily and monthly compounding. When comparing CDs, comparing APY rather than APR removes the compounding frequency variable.
Official sources
- CD definition and consumer guide: CFPB, What is a certificate of deposit (CD)?
- FDIC deposit insurance limits: FDIC, Deposit Insurance at a Glance
- Interest income tax treatment: IRS, Topic 403: Interest Received
- Truth in Savings Act APY disclosure rules: 12 C.F.R. Part 1030, CFPB
Reviewed by the CalculatorHub team, edited by James Graham, 12 June 2026. See our methodology. General information, not financial advice.