CD Calculator
CD Account Terms
CD Maturity Results
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| Total Interest Earned | — |
How Certificate of Deposits (CDs) Compound
A **Certificate of Deposit (CD)** is a low-risk financial product offered by banks and credit unions. It provides a fixed interest rate in exchange for leaving a deposit untouched for a specified period of time.
The Formula for APY to Periodic Rate
Unlike nominal interest rates, banks advertise CDs using **Annual Percentage Yield (APY)**, which represents the total rate of compound interest earned in a year.
To calculate daily or monthly compound interest from APY:
r_periodic = (1 + APY)^(1/n) - 1
Where n is the compounding frequency (e.g. 365 for daily, 12 for monthly). The ending balance is then:
Maturity Value = Deposit × (1 + r_periodic)^(n*t)
Disclaimer. This calculator is for informational purposes only. Withdrawals before maturity are usually subject to early withdrawal penalties.