CD / APY Growth Calculator
Enter your principal, APY or APR, compounding, and term to see your CD’s future value and total interest earned—updated instantly.
CD details
Results
Results interpretation
- APY is the best number for comparing CDs—it already reflects compounding.
- For the same APR, more frequent compounding (e.g., daily) produces a higher APY and slightly higher future value.
- Longer terms and larger principals grow more, but weigh liquidity—CDs often have penalties for early withdrawal.
- Who it’s for: savers deciding among CD quotes with different rates and compounding rules.
How to use this calculator
- Enter your principal deposit.
- Select whether you know APY or APR and set compounding.
- Choose your CD term (years and months).
- Review the future value, interest earned, and APY↔APR view.
- Compare different offers by adjusting rates and compounding.
How this calculator works
Formula & assumptions
Given a nominal APR r and m compounding periods per year, the effective annual yield (APY) is (1 + r/m)^m − 1. Conversely, with a quoted APY E, the equivalent nominal APR is m × ((1 + E)^(1/m) − 1).
Future value after t years is FV = P × (1 + r/m)^(m×t), where P is your principal.
Assumptions: fixed rate, no additional contributions, no penalties, no taxes, and compounding at the selected frequency. Treat results as planning estimates.
Use cases & examples
Example 1 — 12-month CD: $10,000 at 5.10% APY, daily compounding → compare the APR shown above to see the nominal rate behind that APY.
Example 2 — Quarterly vs. monthly: Same APR but quarterly vs. monthly compounding produces a slightly different APY and future value—check the APY row to compare apples to apples.
Example 3 — Laddering: If you’re splitting funds across several terms, run each CD separately and sum future values to estimate your ladder’s total.
CD / APY Growth: How Certificates of Deposit Earn Interest
A CD / APY growth calculator shows exactly how a certificate of deposit turns today’s principal into a larger balance at maturity. Banks often advertise a bold APY (annual percentage yield), while fine print mentions an APR (nominal rate) and the compounding frequency—daily, monthly, or quarterly. APY already includes the effect of compounding over a year, which makes it the best number for comparing CDs across banks. The calculator converts between APY and APR for the compounding you select and projects your future value and total interest earned for any term you enter.
APY vs. APR: what’s the difference?
APR is the nominal rate, while APY is the effective rate after compounding is applied for a full year. If two banks both claim a 5.00% APR but one compounds daily and the other annually, the daily compounding CD will show a slightly higher APY—and a slightly higher maturity value. When a bank advertises only APY, they are implicitly telling you the combined result of the nominal rate and compounding schedule. That’s why APY is the “apples-to-apples” comparison across providers.
What actually grows your money?
Three levers matter most: principal (how much you deposit), rate (APY/APR), and time (term). Larger principals and longer terms increase the base that earns interest. Higher APY boosts each compounding cycle, nudging the curve upward. For short terms, differences are modest; over multiple years, compounding accumulates meaningfully—even on CDs, which are conservative by design.
Choosing compounding frequency
Most modern CDs compound daily, but some still compound monthly or quarterly. All else equal, more frequent compounding yields slightly more interest because interest is credited more often. The difference between daily and monthly compounding at the same nominal rate is usually small but measurable, especially on large deposits and multi-year terms. If two offers show the same APY, the future value will be the same at one year.
Penalty risk and liquidity
CDs typically charge an early withdrawal penalty (for example, 3–6 months of interest). If you might need the cash, consider a shorter term or a CD ladder with staggered maturities. A ladder gives you periodic access to principal while keeping most of your funds in higher-yield terms. This calculator doesn’t model penalties, so always compare the penalty language in your disclosures to your likely timeline.
Taxes and account type
Interest from CDs is typically taxable in the year it’s credited, unless the CD sits inside a tax-advantaged account. The calculator shows gross interest; your after-tax outcome depends on your situation and account type. For accurate planning, consider the after-tax APY or use CDs in tax-advantaged accounts where appropriate.
Putting it all together
To compare offers, focus on APY first. If you only have an APR, choose the compounding frequency and let the tool convert to APY. Enter your principal and term to see future value and interest earned. If liquidity matters, shorten the term or split funds across several CDs. A clear view of APY vs. APR—plus how compounding actually works—helps you pick the right CD without guesswork.
CD / APY Growth — FAQ
Is APY better than APR for comparing CDs?
Yes. APY already includes compounding, so it’s the cleanest way to compare different offers.
Why does compounding frequency matter?
More frequent compounding credits interest more often, producing a slightly higher APY and maturity value.
Do penalties affect the result?
The calculator ignores penalties; check your CD’s disclosure if you may withdraw early.
What’s typical: daily or monthly compounding?
Daily compounding is common today, but some banks still use monthly or quarterly schedules.
Is CD interest taxable?
Usually yes in the year it’s credited, unless held in a tax-advantaged account.