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CD calculator
How much interest a certificate of deposit earns over its term, from the APY the bank quotes.
A $10,000 CD at 4% APY earns $400 in 12 months and $2,167 over 5 years. Because the APY already includes compounding, the calculation only needs the deposit, the APY and the term.
Interest earned
$400
$10,000 at 4% APY for 12 months ends at $10,400.
Before tax. Early withdrawal usually costs a penalty set by the bank.
| Term | Interest | Balance at maturity |
|---|---|---|
| 3 months | $99 | $10,099 |
| 6 months | $198 | $10,198 |
| 9 months | $299 | $10,299 |
| 12 months | $400 | $10,400 |
| 18 months | $606 | $10,606 |
| 24 months | $816 | $10,816 |
| 36 months | $1,249 | $11,249 |
| 60 months | $2,167 | $12,167 |
The formula
Interest = deposit × [(1 + APY)months ÷ 12 − 1]
The APY is the yearly yield including compounding, as US banks must state it under Regulation DD. For terms shorter than a year the same formula applies to the fraction of the year.
Interest on $10,000 by APY and term
| APY | 6 months | 1 year | 3 years | 5 years |
|---|---|---|---|---|
| 3% | $149 | $300 | $927 | $1,593 |
| 4% | $198 | $400 | $1,249 | $2,167 |
| 5% | $247 | $500 | $1,576 | $2,763 |
Questions people ask
How much interest will I earn on a $10,000 CD?
At 4% APY, $400 in a year; at 5%, $500. Interest is generally taxable as income.
Is APY or APR better for comparing CDs?
APY, because it includes compounding and banks must state it. The APY calculator converts a rate to APY.
Related
The emergency fund calculator sets how much to keep in cash, and the interest calculator compares simple and compound interest.
Sources
- Consumer Financial Protection Bureau, Regulation DD (Truth in Savings), Appendix A: annual percentage yield calculation.
Last reviewed by Asier Fernández, editor, on . Educational information only, not financial advice. How we calculate