CD Calculator
Calculate certificate of deposit returns, APY, and compare compounding frequencies.
How CD Interest Works
A Certificate of Deposit (CD) is a savings product that earns interest on a lump-sum deposit for a fixed period of time. CDs typically offer higher interest rates than regular savings accounts because your money is locked in for the full term. The formula used is A = P(1 + r/n)^(nt), where P is your deposit, r is the annual rate, n is the compounding frequency, and t is the term in years.
Compounding frequency affects your earnings. Daily compounding yields slightly more than monthly or quarterly because interest is calculated and added to your balance more frequently. The APY (Annual Percentage Yield) accounts for compounding and represents your true annual return, making it easy to compare CDs with different compounding frequencies.