This CD rate calculator estimates the interest you will earn on your certificate of deposit, the annual percentage yield (APY) and the ending balance (future value of CD). There is in depth information on this topic below the tool.

Certificate of Deposit amount:*
Annual interest rate:*
Certificate of Deposit term:*
Compounding frequency:*

How does this CD rate calculator work?

This fixed rate certified deposit calculator can help compare between multiple offers by taking account of the following variables:

  • Certificate of Deposit amount (CDA) you deposit.

  • Annual interest rate (AIR) which is the percentage given by bank. Please remember that the APR from the offer the bank has is usually compounded annually.

  • Certificate of Deposit term (CDT) that can be either in months or years.

  • Compounding frequency (CF) that can be either Daily, Monthly, Quarterly, Semi-annually or Annually.

  • Ending balance (Future value of CD) = A

The algorithm behind this CD rate calculator applies the formulas provided here:

  • Ending balance (Future value of CD) = A

CD Certificate of Deposit formula


CDT is by default considered as number of years.

CF is 365 for Daily, 12 for Monthly, 4 for Quarterly, 2 for Semianually and 1 for Annually.

  • Total interest earned from CD = B

B = A - CDA

  • Annual Percentage Yield (APY) = C

APY formula on CD Certificate of Deposit

Certificate of deposit definition

In finance, the certificate of deposit is a savings related product that requires the owner to deposit a certain amount of money over a defined period of time with the condition that the bank will offer a specific interest rate for the cash deposited, while the owner cannot access or use the money until the end of the term of the CD. In case the client makes use of the amount in question before/during the time frame agreed with the bank then he will lose the interest for the period money was deposited so far.

CDs are considered to be one of the safest instruments to invest within the world as they are insured, thus they are very often preferred by people. Within United States the authority that insures them is the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for unions of credit.

Please take account of the fact that CDs are different from savings accounts as the certificate of deposits have a fixed/predefined term (usually monthly, of 3 months, 6 months, 1 year, 2 years or similar up to 5 years), which means the CDs should be kept until the maturity of this period, when they can be withdrawn with the interest accumulated.

What are the advantages of CDs?

  • In comparison with the savings accounts banks usually grant higher interest rates than they do on current savings accounts from which money may be withdrawn whenever the clients wants.
  • Usually, the longer the term of the CDs is, the higher interest rate offered.
  • In most cases, the greater the amount deposited is the higher the interest rate received.
  • Due to a strong competition in attracting fixed deposits that can be further used by banks to finance their business, smaller competitors within the banking industry have the tendency to competitive higher interest rates than well positioned ones.
  • CDs are considered safe instruments as they are insured.

  • CDs earn compound interest which means that depending on the compounding frequency the interest gets capitalized to the principal. Thus the owner earns interest from the one previously capitalized.

Example of a calculation

Let’s assume an individual wants to deposit $100,000 over 3 years, with a fixed interest rate of 5% compounded monthly. How much does he earn?

Ending balance (Future value of CD) = $116,147.22

Total interest earned from CD = $16,147.22

Annual Percentage Yield (APY) = 5.1162%

An annual interest rate of 5.00% is equivalent to 5.1162% compounded Monthly.

27 Feb, 2015