CD Calculator

The FDIC, the US government’s deposit insurer, publishes a national average rate for each CD length every month (FDIC national rates). For US readers, the calculator puts your rate next to that average, in dollars, so you can see whether your offer is below it or well above it. The average is a reference point, not the best rate you can find.

Both are safe places for money you don’t want to risk. The difference is what you trade. A CD fixes the rate for the whole term, so it can’t drop, but your money is locked in. A high-yield savings account lets you take the money out any day, but the bank can lower its rate at any time.

A CD usually fits money you are sure you won’t need before a known date, like a down payment in 18 months. A savings account usually fits an emergency fund, or money you might need soon. In the calculator, open More options and enter a savings account rate to see both side by side. The comparison assumes the savings rate stays the same, which it rarely does.

Each bank sets its own penalty, and it is written in the account agreement. Most count it in months of interest. Common values are 3 months of interest for a CD of up to a year, 6 months for up to three years, and 12 months for longer ones. US federal rules set only a minimum, 7 days of interest for money taken out in the first 6 days (12 CFR 204.2). Everything above that is the bank’s choice.

The calculator starts with those common values so you can see how it works. They are not your bank’s rule. Ask your bank for its exact penalty and enter it under More options. Some banks also sell “no-penalty” CDs, which let you leave early without a charge, usually at a lower rate.

This calculator doesn’t work out a switch for you, but the idea is simple. Compare two numbers: the penalty you would pay now, and the extra interest the new rate would earn over the months you have left. A worked example: say you have $10,000 at 3% with 9 months to go, and another bank offers 4.5%. The higher rate earns about $110 more over those 9 months. If the penalty is 3 months of interest, about $75, switching leaves you roughly $35 ahead. With a 6-month penalty, about $150, it doesn’t pay. The example assumes the new CD runs for the same 9 months, and it leaves out tax and any other difference in the terms.

A fixed rate protects you if rates fall, and holds you back if they rise. Nobody can reliably say which will happen, including this calculator. If you can’t decide, some people split the money across several CDs of different lengths, for example one year, two years and three years. This is called a CD ladder. Part of the money comes free every year, and each part can be renewed at the rate of that day.

On the end date, the money is yours to take, together with the interest. What happens if you do nothing depends on your account terms: many CDs renew automatically for the same term at the current rate, which may be lower than what you had, and many banks give a short grace period to decide. Check both in your account agreement. The US bank regulator explains what happens to a CD that ends and isn’t collected. The calculator shows your end date so you can put it in your calendar.

The FDIC insures $250,000 per depositor, per insured bank, for each ownership category, such as an account in your name alone or a joint account. Credit unions have the same limit through the NCUA. People with more usually spread the money across several banks, or across different ownership categories. The limit counts the interest your CD has earned too, and any other deposits you hold at the same bank in the same ownership category. So if you enter more than $250,000, the calculator shows that this deposit alone is above the standard limit. How much of your money is actually covered depends on all your accounts there.

This calculator covers a standard CD: one deposit, one fixed rate, one fixed term. Other kinds work differently. A brokered CD is bought through an investment account and can be sold before the end, at a price that can be lower than what you paid (Investor.gov explains the risks). A callable CD can be ended early by the bank. A bump-up CD lets you raise the rate once if the bank’s rates go up. The math on this page does not fit them.

On the early withdrawal chart, look at the month when you might realistically need the money. It shows what would come back, and from which month you get at least your full deposit. Then add your tax rate under More options, and see how much of the interest you really keep.

Want to see what your buying power does over longer periods? The Inflation Calculator shows what today’s money will be worth years from now. Saving a little every month, not one lump sum? The Compound Interest Calculator fits that better.

It doesn’t know your bank’s exact penalty, your exact tax, or what rates or prices will do next. It uses one tax rate and one inflation rate for the whole term, while real life changes year to year. Outside the US, the math is the same (a fixed deposit, term deposit or GIC works the same way), but the insurance limit and the national average apply only to the US. Treat the result as a clear estimate, and check the final numbers with your bank.