CD Interest Calculator
Calculate how much interest you'll earn on your CD investment. See total interest earned, effective APY, and monthly interest breakdown.
CD Details
Total: 12 months (1.0 years)
Principal vs Interest
Interest Growth Over Time
Monthly Interest Breakdown
| Month | Monthly Interest | Cumulative Interest | Total Value |
|---|---|---|---|
| 1 | $41.75 | $41.75 | $10,041.75 |
| 2 | $41.93 | $83.68 | $10,083.68 |
| 3 | $42.10 | $125.78 | $10,125.78 |
| 4 | $42.28 | $168.05 | $10,168.05 |
| 5 | $42.45 | $210.50 | $10,210.50 |
| 6 | $42.63 | $253.13 | $10,253.13 |
| 7 | $42.81 | $295.94 | $10,295.94 |
| 8 | $42.99 | $338.93 | $10,338.93 |
| 9 | $43.17 | $382.09 | $10,382.09 |
| 10 | $43.35 | $425.44 | $10,425.44 |
| 11 | $43.53 | $468.97 | $10,468.97 |
| 12 | $43.71 | $512.67 | $10,512.67 |
What is CD Interest?
CD interest is the return you earn on your certificate of deposit investment. Unlike simple interest, most CDs use compound interest, which means you earn interest on both your initial principal and previously earned interest.
Our CD interest calculator helps you understand exactly how much interest you'll earn, how it accumulates over time, and the impact of different compounding frequencies.
How CD Interest is Calculated
CD interest is calculated using the compound interest formula:
Where:
P = Principal (initial deposit)
r = Annual interest rate (APY)
n = Compounding frequency per year
t = Time period in years
Our CD interest calculator automatically handles this calculation and shows you the breakdown month by month.
Simple vs Compound Interest on CDs
Most CDs use compound interest, which is more beneficial than simple interest:
Compound Interest
- Earn interest on interest
- Higher total returns
- Used by most CDs
- Compounds daily, monthly, or quarterly
Simple Interest
- Only earns on principal
- Lower total returns
- Rarely used for CDs
- Fixed calculation
How Compounding Frequency Affects Interest
The frequency of compounding significantly impacts your total interest earned:
- Daily Compounding: Interest calculated every day - highest returns
- Monthly Compounding: Interest calculated monthly - good returns
- Quarterly Compounding: Interest calculated every 3 months - moderate returns
- Annual Compounding: Interest calculated once per year - lowest returns
Use our CD interest calculator to see the exact difference between compounding frequencies for your investment.
Tips to Maximize CD Interest
1. Choose Higher Rates
Even a 0.5% difference can significantly impact your total interest earned over time.
2. Opt for Daily Compounding
Daily compounding yields the highest returns, though the difference from monthly is usually small.
3. Consider Longer Terms
Longer-term CDs typically offer higher interest rates, resulting in more total interest earned.
4. Understand Tax Implications
CD interest is taxable as ordinary income. Use our calculator's tax feature to see your after-tax returns.