Calculate how much interest you'll earn on a CD based on deposit amount, APY, and compounding frequency.
CD interest is taxed as ordinary income
Formula: A = P × (1 + r/n)^(n×t) Where P = principal, r = annual rate, n = compounding periods/yr, t = years
What is a Certificate of Deposit?
A CD is a savings product where you deposit money for a fixed term at a guaranteed interest rate. CDs typically offer higher rates than savings accounts because your money is locked in. Early withdrawal usually incurs a penalty.
CD Strategies
CD Ladder: Split deposits across multiple CDs with staggered maturity dates for liquidity
Bump-Up CD: Allows one rate increase if rates rise during the term
No-Penalty CD: Allows early withdrawal without penalties (usually lower rate)