CD Calculator
Calculate Certificate of Deposit earnings, compare different CD terms and rates, and find the best CD investment for your savings goals.
CD Earnings Results
CD Summary
Current CD Rates (2024)
3-Month CD: 4.0-5.0%
1-Year CD: 4.5-5.5%
3-Year CD: 4.0-5.0%
5-Year CD: 4.0-4.8%
Tip: Rates vary by bank and amount
Understanding Certificate of Deposit (CD) Investments
A Certificate of Deposit (CD) is a savings account that earns a fixed interest rate for a fixed period of time. CDs are considered low-risk investments and are insured by the FDIC up to $250,000 per depositor.
How CDs Work
- Fixed Term: CDs have predetermined maturity dates
- Fixed Rate: Interest rate is guaranteed for the term
- FDIC Insured: Protected up to $250,000 per depositor
- Penalty for Early Withdrawal: Fees for accessing funds before maturity
- Higher Rates: Generally offer higher rates than savings accounts
CD Terms and Rates
| CD Term | Typical APY Range | Best For | Early Withdrawal Penalty |
|---|---|---|---|
| 3-6 months | 4.0-5.0% | Short-term savings | 3 months interest |
| 1 year | 4.5-5.5% | Emergency funds | 6 months interest |
| 2-3 years | 4.0-5.0% | Medium-term goals | 12 months interest |
| 4-5 years | 4.0-4.8% | Long-term savings | 24 months interest |
CD Laddering Strategy
CD laddering involves purchasing multiple CDs with different maturity dates. This strategy provides liquidity while maintaining higher interest rates and allows you to take advantage of rising rates.
- Example: Buy CDs maturing in 1, 2, 3, 4, and 5 years
- Benefits: Regular access to funds, higher average rates
- Risk Management: Spreading maturity dates
- Rate Opportunities: Reinvest at higher rates when CDs mature
FDIC Insurance
CDs are FDIC-insured up to $250,000 per depositor, per bank. This means your principal and interest are protected even if the bank fails.
- Coverage: Up to $250,000 per depositor, per institution
- Joint Accounts: Up to $250,000 per person
- Multiple CDs: Separate coverage for each CD
- Interest: Accrued interest is also insured
CD vs. Other Investments
| Investment | Risk Level | Liquidity | Potential Return |
|---|---|---|---|
| CD | Very Low | Low (fixed term) | 4-5% |
| High-Yield Savings | Very Low | High | 4-5% |
| Money Market | Very Low | High | 4-5% |
| Stocks | High | High | 7-10%+ |
Choosing the Right CD
- Short-term CDs: For money you'll need soon (3-12 months)
- Long-term CDs: For higher rates when rates are expected to fall
- CD Laddering: For balanced liquidity and yield
- Online Banks: Often offer higher rates than traditional banks
- Credit Unions: May offer competitive rates for members
Early Withdrawal Penalties
CDs have penalties for early withdrawal that typically range from 3-24 months of interest, depending on the term length. Consider your liquidity needs before investing.
Tip: CDs are excellent for conservative investors seeking guaranteed returns. Use this calculator to compare different CD options and determine which term and rate combination best fits your financial goals. Consider CD laddering for optimal liquidity and yield management.