CD Calculator

This is a fixed rate certified deposit calculator with tax and inflation considered. Different types of compound can be selected as needed. To understand the difference, please use the compound interest calculator. The APR given by bank is normally compounded annually.

Deposit Amount 
Interest Rate%
Deposit Length year month
Marginal Tax Rate%
Inflation Rate%


End Balance$11,576.25
After Inflation Adjustment$10,593.91
Total Principal$10,000.00
Total Interest$1,576.25
Balance Accumulation Graph

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Advantages of CDs

When you're ready to save money, and you have enough so that you can put some savings aside for a period of time without touching them, then you should consider Certificates of Deposit, or CDs.

CDs normally offer a higher rate of interest than savings accounts, and there is little or no risk in putting your savings into them. But you must agree to leave your money in the CD for a fixed period, and not make use of it. The money stays in until the so-called maturity date, at which point you have the right to withdraw it. If you take it out before that date, you pay a heavy penalty fee. There are also many kinds of CDs with variable rates of interest, changing rates of interest, or interest rates linked to indexes of various kinds.

Why are CDs safe? Because they are protected under the Federal Deposit Insurance Corporation (FDIC). As long as you're with an FDIC-insured bank – most U.S. based banks are – all of your funds up to $250,000 on deposit are guaranteed by the government agency should the bank fail. If you want to deposit more than that, put your funds in a different bank, and keep spreading them around so that you never exceed the FDIC limit for protection.

What's good about CDs is that they earn compound interest. Every interest period, your funds earn a percentage of interest, and that money gets added to them. Then, the next day, the new total gets interest added again, obviously more than the day before. It adds up nicely.

But different banks offer different amounts of interest on CDs, and varying interest periods longer-term CDs pay higher rates of interest, but the amount varies from bank to bank. This is why it is very important to shop around for CDs, and to compare maturity periods, and –here's the key term -- annual percentage yield. It's the annual percentage yield that determines how much compound interest you will receive.