CD Calculator
Find out exactly what a certificate of deposit will be worth at maturity — interest earned, effective APY and year-by-year growth — for any deposit, rate and term.
How much will a $10,000 CD earn in 5 years?
Certificate of deposit (CD): A certificate of deposit (CD) is a savings account that holds a deposit for a fixed term at a fixed interest rate, paying that rate until the maturity date. A $10,000 CD at 4.50% for 5 years, compounded monthly, matures at $12,517.96 — $2,517.96 of interest — an effective APY of 4.59%. Compounding daily raises the maturity value slightly to about $12,523, while compounding annually lowers it to about $12,462.
How to calculate a CD's maturity value
- Take the deposit amount, the annual interest rate and the term in years.
- Divide the rate by the number of compoundings per year n, and raise (1 + r ÷ n) to the power of n × years.
- Multiply the deposit by that growth factor to get the maturity value.
- APY = (1 + r ÷ n)^n − 1 expresses the same growth as a single annual rate, so CDs with different compounding can be compared fairly.
Source: IRS Tax Topic 403 — Interest Received
Growth by year
Assumes interest is reinvested in the CD and no withdrawals are made before maturity.
How this CD calculator works
A CD pays a fixed rate on your deposit for a fixed term, and the interest itself earns interest as it is credited — that is compounding. This calculator applies the compound-growth formula with your chosen compounding frequency (daily, monthly, quarterly or annual) and builds a year-by-year growth table. It also converts the stated rate into an effective APY, which is the number that actually lets you compare two CDs fairly: a 4.45% rate compounded daily and a 4.50% rate compounded annually are much closer than the headline rates suggest, and the APY tells you which one truly pays more.
What the calculator assumes: the full deposit goes in on day one, interest is left in the CD to compound, and you hold to maturity. CDs punish early withdrawal — typically three to twelve months of interest — so money you might need mid-term belongs in a high-yield savings account instead.
The CD formula
P = deposit · r = annual rate · n = compoundings per year · t = years
APY = (1 + r ÷ n)n − 1
Worked example
Deposit $10,000 in a 5-year CD at 4.50% compounded monthly. The formula gives (1 + 0.045/12)60 ≈ 1.25180, so the CD matures at $12,517.96 — $2,517.96 of interest — and the effective APY is 4.59%. Switch the compounding to daily in the calculator and the maturity value rises a few dollars to about $12,523; switch it to annual and it falls to about $12,462. Compounding frequency is a small effect; the rate and term do the heavy lifting.
How to get more from CDs
- Compare APY, not rate. Banks are required to disclose APY, and it bakes in compounding. It is the only apples-to-apples number across different banks and frequencies.
- Build a CD ladder. Split a large deposit across 1-, 2-, 3-, 4- and 5-year CDs. One matures every year, capturing longer-term rates on most of the money while keeping regular access — and each maturing CD can be reinvested at current rates.
- Mind the early-withdrawal penalty. Breaking a 5-year CD after one year often costs six to twelve months of interest, which can erase most of what you earned. Keep genuine emergency money out of CDs.
- Watch the renewal window. Most CDs auto-renew at maturity — sometimes at a much lower rate than new offers. You typically have a grace period of about 7–10 days to move the money without penalty.
- Consider taxes. CD interest is taxed as ordinary income in the year it is credited, even if you leave it in the account. A 4.5% CD nets roughly 3.4% after tax for someone in the 24% bracket — still competitive for guaranteed money, but worth knowing.
CD vs. other safe options
A CD trades flexibility for certainty: unlike a savings account, the rate cannot drop mid-term, and unlike bonds, the principal does not fluctuate in value. If your goal is a known amount on a known date — a house deposit in three years, say — a CD is hard to beat. For longer horizons where the money can ride out market swings, compare what the same deposit does in the compound interest calculator at investment-style returns, and if a brokered or callable CD is on your radar, read its terms twice: "callable" means the bank can end the deal early precisely when rates fall.
Frequently asked questions
What will a $10,000 CD be worth in 5 years?
At 4.50% compounded monthly, $12,518.00 — that is $2,518.00 of interest. The same deposit at 3% grows to about $11,616, and at 5.5% to about $13,157. Enter your bank's actual APY above to get your exact maturity value.
What is the difference between APR and APY on a CD?
The rate (sometimes called APR here) is the nominal annual rate before compounding. APY is what you effectively earn over a year after compounding is included, so APY is always equal to or slightly higher than the rate — 4.50% compounded monthly is a 4.59% APY. Always compare CDs by APY.
What happens if I withdraw from a CD early?
The bank charges an early-withdrawal penalty, commonly three months of interest on short CDs and six to twelve months on longer ones. On low-rate or young CDs the penalty can eat into your principal. Some banks offer no-penalty CDs at slightly lower rates if flexibility matters to you.
Are CDs insured?
Yes — CDs at FDIC-insured banks are covered up to $250,000 per depositor, per bank, per ownership category, and credit-union CDs carry equivalent NCUA coverage. That federal backing is what makes a CD's return genuinely guaranteed, unlike money-market funds or bonds.
Is a CD ladder worth the effort?
For amounts above roughly $10,000 that you will not need all at once, usually yes. A ladder keeps a CD maturing every year, so you regularly capture new (possibly higher) rates and always have a slice becoming penalty-free soon, while most of the money still earns long-term rates. The setup takes an afternoon; after that it mostly runs itself.
Sources
- IRS Tax Topic 403 — Interest Received — Interest, including CD interest, is taxed as ordinary income in the year it is credited.