Calculate Your CD Earnings
About CD Investments
A Certificate of Deposit (CD) is a savings certificate with a fixed maturity date and fixed interest rate. CDs are a low-risk investment option offered by banks and credit unions. When you open a CD, you agree to leave your money in the account for a specified term (typically ranging from 3 months to 5 years). In return, the bank pays you a higher interest rate than you'd earn with a regular savings account.
This calculator helps you determine how much your CD investment will be worth at maturity, including both your original deposit and the interest earned. The results are based on compound interest calculations with the frequency you select. CDs are an excellent way to grow your savings with minimal risk, making them ideal for conservative investors and those saving for specific goals like a down payment on a house or a child's education.
Unlike stocks or mutual funds, CDs offer guaranteed returns and are FDIC insured up to $250,000 per depositor, per institution. This makes them one of the safest investment vehicles available, especially during volatile market conditions.
Frequently Asked Questions
What is a CD (Certificate of Deposit)?
A CD is a type of savings account with a fixed interest rate and fixed date of withdrawal (maturity date). CDs typically offer higher interest rates than regular savings accounts in exchange for keeping the funds deposited for the full term.
What happens if I withdraw my money early?
Most CDs charge an early withdrawal penalty if you access your funds before the maturity date. This penalty varies by institution but often amounts to several months' worth of interest.
How often is interest paid on CDs?
Interest can be compounded at different frequencies - daily, monthly, quarterly, semi-annually, or annually. The compounding frequency affects your total return.
Are CD investments FDIC insured?
Yes, CDs offered by FDIC-insured banks are protected up to $250,000 per depositor, per institution, making them a very safe investment option.
Benefits of CDs
- Guaranteed returns with fixed interest rates
- FDIC insured up to $250,000 per institution
- Higher interest rates than regular savings accounts
- Various term lengths to match your financial goals
- Excellent for saving towards specific financial goals
Investment Tips
- Consider CD laddering to balance liquidity and returns
- Compare rates from multiple banks before investing
- Use CDs for funds you won't need until maturity
- Reinvest at maturity to continue growing your savings