CD calculator

What APY actually means (and why it’s different from the interest rate)

APY (annual percentage yield) already factors in how often interest compounds — daily, monthly, whatever the bank does — into one clean annual number. That’s why this calculator only asks for APY, not a separate compounding frequency: using the bank’s quoted APY directly gives you the accurate maturity value without needing to guess how they compound it internally.

How to use this calculator well

Use the exact APY quoted for the specific term you’re considering — banks often offer different APYs for a 6-month CD versus a 24-month CD, so don’t reuse one rate across every term you’re comparing.

Common mistakes

• Confusing a promotional “intro rate” with the full-term APY — some CDs advertise a rate that only applies for part of the term.
• Forgetting about early withdrawal penalties — most CDs charge a penalty (often several months of interest) if you pull the money out before maturity. This calculator assumes you hold to full term.
• Not comparing against a high-yield savings account — if the CD’s APY isn’t meaningfully higher than a liquid HYSA, the lack of access on a CD may not be worth it for you.

FAQ

Is a CD better than a high-yield savings account? It depends on the rate difference and how much you need access to the money. A CD typically only makes sense if it pays a meaningfully higher rate than a liquid alternative, given you’re giving up access to the funds.

What happens if rates go up after I lock in a CD? You’re stuck at your locked-in rate until maturity (or until you pay the early withdrawal penalty) — this is the tradeoff for a CD’s rate certainty. Some banks offer “bump-up” or “step-up” CDs that adjust for this, worth asking about if you’re worried about this scenario.