CD calculator: what a certificate of deposit earns, and what breaking it costs
A certificate of deposit trades flexibility for a fixed rate: you agree to leave money alone for a set time, and the bank agrees not to cut your rate. That works well when you know you won’t need the money, and less well when plans change. This calculator shows what a CD would earn by maturity, and what an early withdrawal penalty would take if you needed the money sooner.
CD calculator
- Interest at maturity
- –
- Value at maturity
- –
- Early withdrawal penalty
- –
- If you withdraw early
- –
Assumes the APY stays fixed for the term and interest stays in the CD. Penalties are shown as simple interest at the APY for the stated number of months; banks word their penalties differently, and some can take principal if you haven’t earned enough interest yet. Taxes on interest are not included. Compare today’s CD rates. Everything here runs in your browser; nothing you enter is stored or sent.
What this calculator can help you understand
- How much interest a CD would earn by the end of its term.
- What its early withdrawal penalty is worth in dollars.
- What you’d get back if you withdrew before maturity.
When it’s useful
- When you’re comparing CD offers with different terms and rates.
- When you’re deciding between a CD and savings.
- When you’re thinking about breaking a CD to use the money or move it to a better rate.
Who it’s for
- Savers with money set aside for a known date, like a down payment or tuition.
- People who want a fixed rate for part of their savings.
- Anyone considering a CD ladder.
What to enter
| Input | What it means | Where to find it |
|---|---|---|
| Deposit | The amount you’d put in the CD | Your savings |
| APY | The annual percentage yield, including compounding | The bank’s rate page |
| Term in months | How long the money stays in the CD | The offer |
| Early withdrawal penalty | Months of interest charged if you withdraw early | The account disclosure |
| Withdraw early after (optional) | When you might take the money out | Your plans |
How to use it
- Enter your deposit, the APY and the term.
- Enter the early withdrawal penalty from the disclosure.
- Read the interest and the value at maturity.
- To test an early withdrawal, enter the month you might take the money out.
Understanding your results
- Interest at maturity is the value at maturity minus your deposit.
- Early withdrawal penalty is the stated months of interest, worked out as simple interest at the APY.
- If you withdraw early shows your deposit plus the interest earned so far, minus the penalty.
A worked example
Suppose you put $25,000 in a 12-month CD at 4.20% APY with a three-month interest penalty.
- At maturity: $1,050.00 in interest, for $26,050.00.
- The penalty: $262.50.
- Withdrawing after six months: you’d have earned $519.60, so you’d leave with $25,257.10.
- With a six-month penalty, after three months: you’d have earned only $258.46 against a $525.00 penalty, so you’d get back $24,733.46, $266.54 less than you put in.
- Over five years at the same APY, the interest would be about $5,710, if the rate stayed fixed for that whole term.
Common mistakes
- Locking up money you may need. An emergency fund belongs somewhere you can reach without a penalty.
- Comparing interest rates instead of APYs. APY includes compounding, so it’s the fair comparison.
- Ignoring automatic renewal. Many CDs roll into a new term, often at a lower rate, unless you act during a short grace period.
- Assuming penalties can’t touch principal.
What to do with your result
- Compare the result with savings using the high-yield savings calculator.
- If you’re in a state with income tax, compare Treasuries with the Treasury vs. savings calculator.
- Note the maturity date and the renewal grace period on your calendar.
- Compare today’s CD rates.
Limitations to keep in mind
The calculator assumes a fixed APY for the whole term, interest left in the CD, and a penalty stated as months of simple interest. Banks calculate penalties in different ways, and some CDs have special terms, like no-penalty or bump-up features. Taxes aren’t included. This isn’t financial advice.
Frequently asked questions
How is CD interest calculated?
Banks quote an APY, which already includes compounding. Over a term in months, the value at maturity is deposit × (1 + APY)^(months ÷ 12). For $25,000 at 4.20% for 12 months, that’s $26,050.00.
What is a typical early withdrawal penalty?
It varies by bank and term, but penalties are usually stated as months of interest, often around three months for shorter CDs and six to twelve months or more for longer ones. Check the account disclosure before you open the CD.
Can an early withdrawal penalty take my principal?
Yes, at many banks. If you withdraw before earning enough interest to cover the penalty, the rest can come out of your deposit. In our example, breaking a CD after three months with a six-month penalty returns $24,733.46.
Are CDs insured?
CDs at FDIC-insured banks are covered up to $250,000 per depositor, per bank, per ownership category. Credit union certificates have similar coverage through the NCUA.
Should I choose a CD or a high-yield savings account?
A CD locks in a rate, which helps if rates fall; savings keeps your money available, and its rate can rise or fall. If you might need the money before the term ends, savings is usually the better fit.
Is CD interest taxable?
Yes. Interest is taxed as ordinary income in the year it’s credited to your account, even if you don’t withdraw it, unless the CD is held in a retirement account like an IRA.
Related calculators
This calculator gives estimates for illustration, based on the figures you enter and the assumptions described on this page. It isn’t financial, tax or legal advice, an offer, or a guarantee of any outcome.