David is a Chartered Financial Analyst with 15 years of experience in investment analysis and personal finance.
This 4-in-1 Certificate of Deposit (CD) calculator helps you see how your savings can grow. Enter any three variables—Principal, Annual Rate (APY), Term, or Future Value—to solve for the fourth.
CD Calculator
CD Formulas (Compound Interest)
FV = PV * (1 + r)^t
Solve for Present Value (PV):
PV = FV / (1 + r)^t
Solve for Rate (r):
r = ( (FV / PV)^(1/t) ) – 1
Solve for Term (t):
t = ln(FV / PV) / ln(1 + r)
Formula Variables
- (PV) Principal (Present Value): The initial amount of money you deposit into the CD.
- (FV) Future Value: The total value of the CD at maturity, including all interest earned.
- (R) Annual Rate (APY): The Annual Percentage Yield, which represents the total interest earned in one year.
- (T) Term (Years): The length of time you agree to leave your money in the CD.
- (r): Rate per period (R / 100)
- (t): Number of periods (T)
Related Calculators
- Compound Interest Calculator
- Future Value Calculator
- Simple Interest Calculator
- Present Value Calculator
What is a Certificate of Deposit (CD)?
A Certificate of Deposit, commonly known as a CD, is a type of savings account offered by banks and credit unions. It has two main features that distinguish it from a regular savings account: a fixed interest rate and a fixed term (length of time).
When you open a CD, you agree to deposit a specific amount of money (the principal) for a specific period (the term). This term can range from a few months to several years. In exchange, the bank agrees to pay you a fixed interest rate (the APY) for that entire time. This rate is typically higher than a regular savings account’s rate because you are giving up liquidity—you cannot withdraw the money before the term ends without paying a penalty.
CDs are considered one of the safest investments because they are insured by the FDIC (at banks) or NCUA (at credit unions) up to $250,000 per depositor. This makes them an excellent choice for goals where you cannot risk losing your principal, such as saving for a down payment in the near future.
How to Calculate CD Future Value (Example)
-
Identify Your CD Details
You deposit $10,000 (PV) into a CD. The bank offers a 5.0% APY (R) for a 5-year term (T). You want to find its total value at maturity (FV).
-
Find the Rate (r) and Term (t)
Rate (r) = 5.0% / 100 = 0.05
Term (t) = 5 years -
Apply the Future Value Formula
The formula is: FV = PV * (1 + r)^t
-
Calculate the Value
FV = $10,000 * (1 + 0.05)^5
FV = $10,000 * (1.05)^5
FV = $10,000 * 1.27628 -
Final Result
Your CD’s future value (FV) after 5 years will be $12,762.82.
Frequently Asked Questions (FAQ)
APY is the effective annual rate of return, taking into account the effect of compound interest. This calculator assumes interest is compounded annually, so the APY and the annual rate are the same. In practice, if a CD compounds daily or monthly, the APY will be slightly higher than the stated interest rate.
How do I find the rate I need to reach my goal?You can use this calculator. Enter your Principal (PV) (how much you have now), your target Future Value (FV), and the Term (T) you can wait. Leave the “Annual Rate (R)” field blank and click “Calculate.” The result will show you the APY you need to find.
What happens if I withdraw my money early?You will almost always have to pay an early withdrawal penalty. A common penalty is several months’ worth of interest (e.g., 3 or 6 months). This can mean you get back less than your original principal if you withdraw very early. Always read the CD’s terms before opening it.
How much do I need to deposit today?To find this, use the calculator to solve for Present Value (PV). Enter your target Future Value (FV), the APY (R) you can get, and the Term (T). The calculator will tell you the principal (PV) you need to deposit today.