CD Calculator

A certificate of deposit is a single lump sum locked with a bank for a fixed term at a fixed rate, with nothing added and nothing withdrawn before maturity. That single fact is what makes its maths simpler than a savings account with a contribution schedule: the balance grows by one closed-form factor rather than a period-by-period ledger. The SEC’s Investor.gov compound interest calculator states it as A = P(1 + r/n)^(nt), where P is the deposit, r the nominal annual rate the bank quotes, n the number of times a year that rate compounds, and t the term in years. This calculator takes the term in months, so a 6-month CD compounding daily produces a fractional exponent (n·t = 182.5) rather than a whole number — the formula and the arithmetic behind it (`powFrac`) handle that directly, the same way a fractional day count is handled when a bank states its own APY under Regulation DD. Speaking of which: the nominal rate a CD advertises is not what it pays over a year, because it does not reflect compounding. 12 CFR Part 1030 (Regulation DD), Appendix A, Part I gives the annual percentage yield as APY = 100[(1 + r/n)^n − 1] — a 4.5% CD compounded daily actually yields 4.60%, and that APY figure, not the nominal rate, is the one worth comparing across banks. The other half of the picture is what happens if you need the money before the term ends. Regulation DD (12 CFR § 1030.4(b)(4)) requires a bank to disclose its early-withdrawal penalty up front but does not standardise the amount; the structure nearly every issuer uses forfeits a stated number of months of interest, computed as simple interest: Penalty = P × (r/100) × (m/12) for m forfeited months. This calculator reports that penalty uncapped rather than protecting principal by assumption, because on a CD cashed out shortly after opening the penalty can genuinely exceed the interest earned so far — a real risk your specific disclosure may or may not carry, and one worth seeing rather than hiding. The deposit itself is a separate question from the rate: at an FDIC-member bank or NCUA-insured credit union it is insured up to $250,000 per depositor, per ownership category, per institution, regardless of how this calculator’s numbers come out. If you want to model regular contributions instead of a single lump sum, or compare compounding frequencies on an ordinary savings account, the compound interest calculator covers that; for a lump sum under simple interest, daily compounding, or after-tax comparisons, see the interest calculator.