CD Calculator (Certificate of Deposit)
A CD is only priced honestly when you say whether the quoted rate is nominal or an APY. This calculator forces the declaration — and shows what the other reading would have paid.
The declaration this page forces, and why
Banks quote CD rates two ways: a nominal rate ('5% interest, compounded monthly') and an APY ('5.12% yield'). The phrases sit side by side in marketing and mean different money. This calculator makes you declare which one you were quoted — then shows the other reading beside the answer, so the cost of the ambiguity is printed, not hidden.
If nominal: value = P(1 + r ÷ m)m × months/12 · If APY: value = P(1 + APY)months/12
Example: $10,000 for 12 months at 5%: declared as a nominal rate compounded monthly, it matures at $10,511.62. Declared as an APY, it matures at exactly $10,500.00. $11.62 rides on one word of the quote.
Early withdrawal: the CD's fine print that matters most
A CD's rate is real only if the money stays: typical penalties confiscate several months of interest, and on a young CD can bite into principal. The maturity figure here assumes the term is completed — hold the CD to its date or price the penalty from your bank's disclosure before counting the yield.
How this is calculated
Nominal mode compounds the entered rate at your chosen frequency across the term in months. APY mode grows the deposit at exactly the entered APY, pro-rated by months ÷ 12 in the exponent. Both readings of your inputs are computed and one is displayed as the counterfactual in the results, deliberately: the comparison is the lesson of the page.
Frequently asked questions
Which number does my bank's advertisement mean?
In the US, CD advertising must include the APY — a lone 'rate' in an ad is usually the nominal interest rate with the APY nearby. On your bank's rate sheet both appear in columns; the APY column is the comparable one.
Is a higher-APY shorter CD better than a lower-APY longer one?
Not decidable from APY alone: the longer CD locks its rate (protection if rates fall) and strands you (cost if rates rise). Ladders — staggered maturities — exist precisely to stop choosing.
What happens at maturity?
A grace window (often 7–10 days) to withdraw or change terms; silence usually means automatic renewal at the then-current rate, which may be far below the promotional rate you signed for.
Are CDs insured?
At insured banks and credit unions, yes — government deposit insurance within its limits per depositor and institution, in the US and equivalent schemes elsewhere. The insurance covers bank failure, not your regret at a better rate elsewhere.
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