CD Calculator

A CD is a deposit you commit for a fixed term (3 months to 5+ years) in exchange for a guaranteed interest rate. At maturity you receive principal plus interest. Withdrawing early typically costs an early-withdrawal penalty of 3–12 months of interest, depending on term. CDs at FDIC-insured banks are insured up to $250,000 per depositor per bank.

APY (Annual Percentage Yield) reflects the effective annual return including the effect of compounding. A CD with a 5% nominal rate compounded monthly has an APY of about 5.12%. By federal regulation, banks must disclose APY so consumers can compare CDs apples-to-apples regardless of compounding frequency.

A CD ladder splits funds across CDs of staggered maturities (e.g., 1, 2, 3, 4, and 5 years). Each year a CD matures, providing liquidity, and is rolled into a new 5-year CD. This balances higher long-term yields with regular access to funds and reduces rate-timing risk.

CDs typically offer slightly higher rates than savings accounts in exchange for locking up funds. When the yield curve is inverted (as it often was in 2023–2024), short-term CDs can match or exceed savings yields. When the curve is normal, longer CDs pay more. Use savings for emergency funds and CDs for money you genuinely won't need until maturity.