Calculate Certificate of Deposit earnings and compare APY across terms. See exactly how much interest your FDIC-insured CD earns with daily, monthly, or annual compounding.
Interest earnings & term comparison
| Term | Ending Balance | Interest Earned | Total Return |
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A CD calculator helps you compare bank CD rates across terms and compounding frequencies before you lock in your money. In 2025, the best 12-month CDs at online banks and credit unions were paying 4.5%–5.0% APY — significantly more than the average savings account at a big national bank. The difference matters: $25,000 in a 5.0% APY 12-month CD earns $1,250, while the same balance in a 0.5% savings account earns just $125. Using this savings calculator before opening an account helps you pick the right term and institution.
Compounding frequency is a smaller but real factor in your final balance. Daily compounding on a $10,000 CD at 5.0% APR earns about $7 more per year than annual compounding — modest by itself, but worth understanding when comparing CD offers across banks. The FDIC insures deposits up to $250,000 per depositor per institution, so spreading large balances across multiple banks using a CD laddering strategy lets you stay fully insured while keeping access to funds as each rung matures.
APY (Annual Percentage Yield) includes the effect of compounding and is always equal to or higher than APR. When comparing CDs, always compare APY — it's the true annual return you'll earn on your deposit.
Daily compounding grows your balance slightly faster than monthly or annual. On a $50,000 deposit at 5% for 5 years, daily compounding adds roughly $85 compared to annual compounding — a meaningful free gain.
Spread money across 1-, 2-, 3-, 4-, and 5-year CDs. As each matures, reinvest at the long-term rate. This strategy balances higher long-term rates with regular access to funds without incurring early withdrawal penalties.
CDs at FDIC-insured banks are protected up to $250,000 per depositor per institution (NCUA covers credit unions). Unlike money market funds, your principal is guaranteed regardless of market conditions.
A certificate of deposit trades liquidity for a fixed, guaranteed rate over a set term. Because the rate is locked, CDs carry no market risk but two real ones: early withdrawal penalties, typically three to twelve months of interest, and reinvestment risk if rates have fallen when the CD matures. The advertised figure is usually APY rather than the nominal rate, and the distinction matters — APY already includes the effect of compounding, so comparing one bank's APY against another's nominal rate overstates the second. CD ladders, staggering maturities across several terms, are the standard way to keep some money accessible without abandoning the longer rates.
A = P(1 + r/n)^(nt)APY = (1 + r/n)^n − 1Early withdrawal penalty ≈ months of interest forfeitedwhere:
Assumptions: FDIC insured to $250,000 per depositor, per bank, per ownership category. Interest is taxable as ordinary income in the year credited, even if the CD has not matured.
SourceFDIC deposit insurance
Work out the maturity value, the true APY, and what breaking it early would cost.
Result$26,742.38 at maturity — $1,742.38 of interest, 4.594% APY
A six-month early withdrawal penalty here would cost about $562 — nearly a third of the total interest. That is why the term should match when you actually need the money, and why a ladder often beats a single long CD despite the slightly lower average rate.