CD Calculator

A Certificate of Deposit (CD) is a time deposit offered by banks with a fixed interest rate and maturity date. CDs typically offer higher interest rates than savings accounts in exchange for leaving money untouched for a specific period.

CD Features

• Fixed Rate: Interest rate locked in for entire term
• FDIC Insured: Protected up to $250,000 per depositor
• Guaranteed Return: Principal and interest guaranteed
• Early Withdrawal Penalty: Fee for accessing funds early

CD Terms and Rates

• Short-term (3-12 months): Lower rates, more flexibility
• Medium-term (1-3 years): Moderate rates, balanced approach
• Long-term (3-5 years): Higher rates, less flexibility
• Longer terms typically offer higher rates

APR vs. APY

• APR: Annual Percentage Rate (simple interest)
• APY: Annual Percentage Yield (compound interest)
• APY is higher than APR when compounding occurs
• APY shows true earning potential

CD Strategies

• CD Laddering: Stagger maturity dates for flexibility
• Rate Shopping: Compare rates from multiple banks
• Promotional Rates: Look for special introductory offers
• Callable CDs: Higher rates but bank can call early

When to Consider CDs

• You have money you won't need for a specific period
• You want guaranteed returns with no risk
• Interest rates are attractive compared to savings accounts
• You're saving for a specific future goal
• You want to diversify beyond stocks and bonds