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CD Calculator

Calculate the future value of your Certificate of Deposit (CD). Compare interest earnings across different terms and rates.

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Applications

Estimating CD maturity values for fixed-income planning, comparing CDs with different compounding frequencies (daily, monthly, quarterly, annual), modeling early withdrawal scenarios to understand penalty costs, and planning CD ladder strategies across multiple maturity dates.

How CD Calculations Work

Applies the compound interest formula A = P(1 + r/n)^(nt) where P is the principal deposit, r is the nominal annual rate, n is the compounding frequency per year, and t is the term in years. Effective APY is calculated as (1 + r/n)^n - 1 to reflect the true annual return accounting for compounding. Early withdrawal penalties are modeled as a fixed number of months of forgone interest.

Fun Fact: The APY you see advertised on a CD is always the EFFECTIVE annual yield, not the nominal rate. A CD advertised at 5.00% APY with monthly compounding actually uses a nominal rate of approximately 4.88%, because the bank compounds the interest monthly to achieve a 5.00% total annual return.

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