How to Use the CD Calculator

1. Enter the initial amount you plan to deposit into the CD.

2. Enter the interest rate offered by the financial institution.

3. Select your term length for how long the money will remain invested.

4. Review your estimated results.

What Is a Certificate of Deposit (CD)?

A certificate of deposit (CD) is a savings account that holds your money for a fixed period, known as the term, in exchange for a predetermined interest rate. CD terms can range from a few months to several years, and withdrawing funds before maturity may result in an early withdrawal penalty. A CD can be useful for saving money you don’t expect to need immediately while earning a predictable return.

FAQs

Can I withdraw money from a CD early?

Yes, but you may have to pay an early withdrawal penalty. The penalty varies by financial institution and CD terms, so check your account agreement before withdrawing funds.

What happens when a CD matures?

When a CD matures, you can typically withdraw your money and earned interest, transfer the funds to another account, or renew the CD for a new term. Some CDs automatically renew if you don’t provide instructions before the maturity deadline.

Are CD earnings taxable?

In the United States, interest earned from most CDs is generally taxable income. Your financial institution may provide tax documents reporting your interest earnings. Tax treatment can vary, so consult a qualified tax professional for advice about your situation.