How does a CD calculator work?
A CD calculator grows your deposit by its yield for the length of the term. The formula is maturity = deposit × (1 + APY)^years, where the years can be a fraction for terms under a year. A $10,000 deposit at a 4% APY is worth $10,400 after 1 year and about $12,167 after 5 years. Because banks quote a CD in APY, which already folds in compounding, the yield is all you need — there is no separate compounding setting to get wrong.
How much interest does a CD pay?
The interest is simply the maturity value minus your deposit, and it depends almost entirely on the APY and the term. At a 4.5% APY, a $10,000 5-year CD earns about $2,462 in interest; the same deposit in a 1-year CD earns $450. For context, the FDIC national average was only 1.65% for a 12-month CD and 1.35% for a 60-month CD as of June 2026 — shopping for a top rate roughly triples what an average CD earns.
What happens if you withdraw early?
Cashing out before the term ends triggers an early-withdrawal penalty, charged as a set number of months of interest. The CFPB notes that “withdrawing money early means paying a penalty fee to the bank,” and the amount varies by institution and term. A common 6-month-interest penalty on a $10,000 CD at 4% costs $200; a 12-month penalty costs $400. On the shortest CDs the penalty can even eat into your principal, so match the term to when you will actually need the money.
Our method and assumptions
This calculator applies the standard CD formula using the APY the bank advertises and assumes the CD is held to maturity at a fixed rate, with no taxes or fees deducted. CD interest is federally insured up to $250,000 (FDIC for banks, NCUA for credit unions) but is taxable as ordinary income in the year it is credited. National average rates are from the FDIC National Rates and Rate Caps (June 15, 2026). Treat the result as a planning estimate, not financial advice.
How to calculate CD interest
- 1
Enter your deposit amount. Type the money you plan to put in the CD — the principal, such as $10,000.
- 2
Enter the APY. Use the annual percentage yield the bank advertises. APY already includes compounding, so you do not need to set a compounding frequency.
- 3
Choose the term. Pick how long your money is locked in — 6 months, 1 year, 5 years, or a custom number of months.
- 4
Add an early-withdrawal penalty (optional). Enter the months of interest your bank charges to cash out early to see what breaking the CD would cost.
CD reference tables
How much a $10,000 CD earns by APY and term, the FDIC national average rates to benchmark any offer, and what an early withdrawal costs.
Interest earned on a $10,000 CD by APY and term
Interest a $10,000 deposit earns at maturity. Scale linearly for other amounts — double it for $20,000.
| APY | 6 months | 1 year | 2 years | 3 years | 5 years |
|---|---|---|---|---|---|
| 1% | $50 | $100 | $201 | $303 | $510 |
| 2% | $100 | $200 | $404 | $612 | $1,041 |
| 3% | $149 | $300 | $609 | $927 | $1,593 |
| 4% | $198 | $400 | $816 | $1,249 | $2,167 |
| 5% | $247 | $500 | $1,025 | $1,576 | $2,763 |
Source: Socko calculation: interest = deposit × ((1 + APY)^years − 1).
National average CD rates by term (FDIC)
The FDIC national average APY for each term as of June 15, 2026 — a benchmark to judge any CD offer. A competitive online CD often pays 2–3× these averages.
| CD term | National average APY |
|---|---|
| 1 month | 0.23% |
| 3 month | 1.15% |
| 6 month | 1.38% |
| 12 month | 1.65% |
| 24 month | 1.53% |
| 36 month | 1.33% |
| 48 month | 1.25% |
| 60 month | 1.35% |
What an early-withdrawal penalty costs (per $10,000 at 4% APY)
Banks set the penalty as a number of months of interest. This is the dollar cost of cashing out early on a $10,000 CD earning 4% — it scales with both the rate and the deposit.
| Penalty | Cost on $10,000 |
|---|---|
| 3 months of interest | $100 |
| 6 months of interest | $200 |
| 9 months of interest | $300 |
| 12 months of interest | $400 |
| 18 months of interest | $600 |
Source: Socko calculation: penalty = deposit × APY × (months ÷ 12). Terms vary by bank (CFPB).
Frequently asked questions
How much does a $10,000 CD earn?
At a 4% APY, a $10,000 CD earns about $400 in 1 year, $1,249 in 3 years, and $2,167 in 5 years. A higher APY or longer term earns more.
What is the difference between APY and interest rate on a CD?
The rate is the base; the APY is the true yearly return after compounding. APY is always ≥ the rate, and it’s the apples-to-apples number to compare CDs.
Is CD interest taxable?
Yes — CD interest is taxed as ordinary income in the year it’s credited, even before you can withdraw it, and is reported on Form 1099-INT. See IRS Publication 550.
What is a CD early withdrawal penalty?
A fee for cashing out early, usually a set number of months of interest — commonly ~3 months on a 1-year CD and 6–12 months on a 5-year CD. It varies by bank and can dip into principal on short CDs.
Are CDs safe?
Yes — bank CDs are FDIC-insured to $250,000 per depositor, and credit-union CDs get the same coverage from the NCUA. Within that limit, your money is guaranteed.
How is a CD different from a high-yield savings account?
A CD locks a fixed rate for a fixed term with a penalty for early withdrawal; a high-yield savings account pays a variable rate you can withdraw anytime. Pick a CD to lock a rate on money you won’t need soon.
Should I choose a longer or shorter CD term?
Match the term to when you need the cash. Longer usually pays more, but in 2026 short CDs yield more than long ones — a CD ladder across several terms hedges the bet and keeps cash maturing regularly.
This tool is for estimation and education, not financial advice. See our methodology for how these figures are calculated and sourced.