CD Calculator
Calculate the maturity balance and total interest earned on a certificate of deposit (CD) given the deposit amount, APY, and term in months.
How It's Calculated
Formula
\text{Maturity Balance} = \text{Deposit} \times \left(1 + \frac{\text{APY}}{100}\right)^{t}\\ t = \frac{\text{Term (months)}}{12}A certificate of deposit (CD) pays a fixed Annual Percentage Yield (APY) in exchange for locking up your deposit for a set term. Because APY already reflects a full year of compounding by definition, this calculator applies it directly over the term expressed in years: Maturity Balance = Deposit × (1 + APY/100)^t, where t is the term in months divided by 12. Total interest earned is simply the maturity balance minus the original deposit. This calculator computes the standard hold-to-maturity outcome only — it does not model early-withdrawal penalties, since penalty terms (a certain number of months' interest, a flat fee, etc.) vary by financial institution and aren't a fixed mathematical rule. If you're considering withdrawing early, check your CD's specific penalty terms separately.
Worked Examples
Standard case: $10,000 deposit, 4% APY, 12-month term
- Term in years: t = 12 / 12 = 1
- Maturity balance: 10,000 × (1 + 0.04)^1 = $10,400.00
- Interest earned: 10,400 − 10,000 = $400.00
Multi-year term: $5,000 deposit, 5% APY, 24-month term
- Term in years: t = 24 / 12 = 2
- Maturity balance: 5,000 × (1.05)^2 = $5,512.50
- Interest earned: 5,512.50 − 5,000 = $512.50
Frequently Asked Questions
Does this calculator include early-withdrawal penalties?
No. Early-withdrawal penalty structures (a number of months' forfeited interest, a flat dollar fee, or some other formula) vary by institution and CD product, so there's no single fixed rule to apply. This calculator computes the standard outcome if the CD is held to full maturity — check your specific CD's terms for its early-withdrawal penalty.
Why does the formula use APY directly instead of a nominal interest rate?
APY (Annual Percentage Yield) is, by definition, already the effective annual return after accounting for compounding — that's exactly what distinguishes it from a nominal (stated) interest rate. Since CDs are almost always advertised by APY, applying it directly once per year (raised to the power of the term in years) gives the correct maturity value without needing to know an underlying compounding frequency.
What happens with a term shorter than 12 months?
The term is converted to a fraction of a year (e.g. 6 months = 0.5 years) and used as a fractional exponent in the same formula — a 6-month CD earns proportionally less than a full year at the same APY, following standard compound-growth math.
Can the APY be 0%?
Yes — 0% is a valid input. The maturity balance simply equals the original deposit with no interest earned, which is the expected boundary case.