What is a certificate of deposit (CD)?

A certificate of deposit is a time deposit that pays a fixed interest rate for a fixed period, in exchange for keeping the money locked until maturity. Early withdrawal usually costs a penalty.

APY (Annual Percentage Yield) is the effective yearly return including compounding. A CD with 6% interest compounded monthly has an APY of about 6.17%.

Certificate of Deposit Calculator

Plan a fixed-deposit style investment.

CD Details

Deposit Amount ($)

Interest Rate (% p.a.)

CD Term (years)

yrs

Compounding

CD Maturity Amount

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Interest Earned

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APY (Annual Percentage Yield)

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Comparing CDs

Always compare the APY, not just the interest rate. APY includes the effect of compounding, so it is the honest number for comparing different CDs with different compounding frequencies.

CD Calculator FAQ

What happens if I withdraw my CD early?▶

Most banks charge a penalty, typically a few months of interest. In some cases the penalty can exceed the interest earned, so it is usually better to keep a CD until maturity.

Are CDs risky?▶

CDs are among the safest investments because the principal is protected (up to deposit insurance limits) and the rate is locked in. The trade-off is a lower return than stocks.