Should I compare APY or the interest rate?

APY, always. It already accounts for compounding frequency, so it is the only figure that makes two products comparable.

Finance & LoansdepositsUnited States only

Certificate of Deposit (CD) Calculator

Certificate of deposit maturity value, with the distinction between the quoted yield and the nominal rate behind it. APY already includes compounding, which is why it is the only figure worth comparing.

Also called: certificate of deposit calculator, apy calculator.

Value at maturity

$10,920.25

$10,920.25 at maturity, $920.25 of it interest. The stated 4.5% yield already includes compounding, so the underlying rate is 4.41%.

Interest earned

$920.25

Nominal rate behind the yield

4.41%

Value halfway through

$10,450.00

Total return

9.2%

Average interest a month

$38.34

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

A yield and a rate are not the same number. The annual percentage yield states what a deposit actually earns over a year including compounding, while the nominal rate is the figure before it. Two products quoting the same nominal rate at different compounding frequencies pay differently; two quoting the same APY pay the same. That is exactly why disclosure rules require the yield.

value = principal compounded m times a year; APY is what that compounding actually yields

P: Deposit (currency)
r: Nominal rate (decimal)
m: Compounding periods a year (periods)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

two years at four and a half percent

Deposit: $10,000.00
Annual percentage yield: 4.5%
Term: 2
Compounded: Monthly

Value at maturity$10,920.25

10,000 * 1.045^2, since APY already includes compounding

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a zero yield leaves the deposit alone

Deposit: $10,000.00
Annual percentage yield: 0%
Term: 2
Compounded: Monthly

Value at maturity$10,000.00

boundary

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annual compounding makes nominal and yield identical

Deposit: $10,000.00
Annual percentage yield: 5%
Term: 1
Compounded: Annually

Value at maturity$10,500.00

degenerate case: the only frequency where the two agree

Open this example

Method and limits

What it assumes

Held to maturity with interest reinvested at the same rate.

What it deliberately does not model

Early withdrawal penalties are common and are not modelled.
Interest is generally taxable in the year credited, which is not applied.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Should I compare APY or the interest rate?: APY, always. It already accounts for compounding frequency, so it is the only figure that makes two products comparable.