A certificate of deposit pays a fixed rate in exchange for leaving your money with the bank for a set term. This CD calculator shows how much your CD will be worth at maturity, how much interest it earns, the APY and APR for the compounding you choose, the tax on the interest and what an early withdrawal penalty would cost.
Quick answer: $10,000 in a 1-year CD at 4.50% APY earns $450.00. Over 18 months it earns $682.54, and over 5 years at 4.00% APY it earns $2,166.53. In the 22% federal tax bracket, $450 of interest leaves $351.00. CDs at FDIC-insured banks are covered up to $250,000 per depositor, per bank, per ownership category.
How to use the CD calculator
- Enter the deposit amount.
- Enter the interest rate and choose whether it is the APY (what banks advertise) or the APR.
- Choose the compounding frequency from the CD’s disclosure (daily is most common).
- Enter the term in months or tap a common term (6 months to 5 years).
- Optionally choose your federal tax bracket and the early withdrawal penalty in months of interest, then press Calculate.
How is CD interest calculated?
| What | Formula | $10,000, 4.50% APY, 18 months |
|---|---|---|
| Balance at maturity | Deposit × (1 + APY)^(months ÷ 12) | 10,000 × 1.045^1.5 = $10,682.54 |
| Interest earned | Balance − deposit | $682.54 |
| APY from APR | (1 + APR ÷ n)^n − 1 | — |
| APR from APY | n × ((1 + APY)^(1 ÷ n) − 1) | Daily (n = 365): 4.402% |
| Federal tax | Interest × tax bracket | 22%: $150.16 |
| Early withdrawal penalty | Deposit × APR × months ÷ 12 | 6 months: $220.10 |
Compounding frequency matters only when you start from the APR. Two CDs with the same APY earn the same amount, whatever their compounding.
How much interest does $10,000 earn in a CD?
Interest earned on $10,000 by APY and term. The full chart from 3.00% to 5.50% in quarter-point steps is below the calculator.
| APY | 6 months | 12 months | 18 months | 24 months | 36 months | 60 months |
|---|---|---|---|---|---|---|
| 3.00% | $148.89 | $300.00 | $453.36 | $609.00 | $927.27 | $1,592.74 |
| 3.50% | $173.49 | $350.00 | $529.57 | $712.25 | $1,087.18 | $1,876.86 |
| 4.00% | $198.04 | $400.00 | $605.96 | $816.00 | $1,248.64 | $2,166.53 |
| 4.50% | $222.52 | $450.00 | $682.54 | $920.25 | $1,411.66 | $2,461.82 |
| 5.00% | $246.95 | $500.00 | $759.30 | $1,025.00 | $1,576.25 | $2,762.82 |
| 5.50% | $271.32 | $550.00 | $836.24 | $1,130.25 | $1,742.41 | $3,069.60 |
For a different deposit, scale the numbers: $25,000 earns 2.5 times as much and $5,000 half as much.
APY vs. APR: which number should I use?
Banks must advertise deposit accounts by APY under the Truth in Savings Act, so use the APY whenever it is shown. The same 4.50% stated as an APR produces different yields depending on compounding:
| 4.50% APR compounded | APY |
|---|---|
| Daily | 4.602% |
| Monthly | 4.594% |
| Quarterly | 4.577% |
| Annually | 4.500% |
Worked examples
- 18-month CD with a 6-month penalty: $10,000 at 4.50% APY grows to $10,682.54. Cashing out early would cost about $220.10 of interest.
- APR quoted, compounded monthly: $25,000 at a 4.25% APR (4.334% APY) for 24 months earns $2,213.84; in the 24% bracket you keep $1,682.52 after federal tax.
- 5-year CD: $5,000 at 4.00% APY ends at $6,083.26, with $1,083.26 of interest.
How to read your results
- The growth table shows interest month by month (or year by year for terms over two years). Each period earns a little more because interest compounds.
- After-tax interest uses only your federal bracket. Add your state rate for a full picture; Treasury bills, by contrast, are exempt from state tax.
- Penalty larger than the interest? That is common in the first months of a CD and means you would get back less than you deposited.
- Saving for a home? See what payment your savings could support with the mortgage calculator.
- Pay down debt or save? Compare the CD rate with your loan’s rate in the loan calculator; paying off a 7% loan beats a 4.5% CD before tax.
- Comparing two offers? The percentage calculator shows the percent difference between two yields or balances.
Common mistakes
- Comparing an APR with an APY. Convert both to APY first; this calculator does it for you.
- Treating the APY as the return for any term. It is a yearly figure: a 6-month CD at 4.50% APY earns about 2.2%, not 4.5%.
- Forgetting about the penalty. Only lock up money you will not need before maturity.
- Letting a CD auto-renew without checking the new rate. Most banks give a short grace period (often 7–10 days) after maturity to withdraw or switch.
- Going over the FDIC limit at one bank. Above $250,000 per depositor, per bank, per ownership category, spread deposits across banks or ownership categories.
These figures are estimates for planning. Actual interest depends on the bank’s day-count method, crediting dates and terms; check your CD’s disclosure or ask your bank. This is not tax advice.
Frequently asked questions
How much will $10,000 earn in a 1-year CD?
At 4.50% APY, a $10,000 one-year CD earns exactly $450.00, for a balance of $10,450.00 at maturity. At 4.00% APY it earns $400.00, and at 5.00% APY $500.00. For a one-year term, the APY is the percentage you earn.
How is CD interest calculated?
Banks add interest to the balance at regular intervals (often daily or monthly), so interest earns interest. The ending balance is deposit × (1 + APY)^(months ÷ 12). For $10,000 at 4.50% APY over 18 months, that is 10,000 × 1.045^1.5 = $10,682.54.
What is the difference between APY and APR on a CD?
APR (the interest rate) is the simple yearly rate before compounding; APY (annual percentage yield) includes the effect of compounding over a year. Federal Truth in Savings rules require banks to quote APY, so you can compare CDs directly. A 4.50% APY compounded daily equals an APR of about 4.402%; a 5.00% APR compounded daily gives an APY of about 5.127%.
Are CDs FDIC insured?
Yes. CDs at FDIC-insured banks are covered up to $250,000 per depositor, per insured bank, for each account ownership category, such as single, joint or certain retirement accounts. Credit union CDs (share certificates) are insured by the NCUA on the same basis.
What is the penalty for cashing a CD early?
Each bank sets its own penalty, usually a number of months of interest: commonly about 3 months on terms up to a year and 6–12 months or more on longer CDs. On $10,000 at a 4.402% rate, 6 months of interest is about $220.10. If you withdraw very early, the penalty can be larger than the interest earned and reduce your principal.
Do you pay taxes on CD interest?
Yes. CD interest is taxed as ordinary income in the year it is credited to your account, even if you leave it in the CD, and your bank reports it on Form 1099-INT. In the 22% federal bracket, $450 of interest leaves $351 after federal tax; state tax may also apply.
Is a CD better than a high-yield savings account?
A CD locks in a rate for the whole term, which helps when rates are expected to fall, but you pay a penalty to get the money early. A savings account rate can change at any time but your money stays available. Many savers keep an emergency fund in savings and put money they will not need for a set time in CDs.
How much will $10,000 earn in a 5-year CD?
At 4.00% APY, $10,000 grows to $12,166.53 in 5 years, earning $2,166.53. At 5.00% APY it earns $2,762.82. Compounding means the interest in year 5 is larger than in year 1.
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