CD Calculator
Interest, Tax, Penalty and APY

At 4.50% APY: $450.00 in 1 year and $920.25 over 2 years, before tax. Because the APY already includes compounding, the value after t years is the deposit × (1 + APY)^t.

Enter your own rate and term in the calculator.

Yes. It is taxed as ordinary income, at your federal bracket rate plus the 3.8% Net Investment Income Tax if your income is high enough, and usually state income tax too.

For a CD longer than a year, you owe tax on the interest each year it accrues, even though you do not get it until maturity; the bank reports it on Form 1099-INT. A CD inside an IRA is taxed only when you withdraw from the IRA.

It is set in the account agreement, typically a number of months of interest (for example 3 months on short terms and 6 to 12 months on longer ones). If you withdraw before you have earned that much interest, the penalty comes out of your deposit: $10,000 at 4.50% APY broken after 1 month with a 6-month penalty returns about $9,816.26.

Enter your bank's penalty in the calculator.

APR (the interest rate) is the rate before compounding; APY is what you actually earn in a year once compounding is included. Banks must quote the APY under the Truth in Savings Act, so compare CDs by APY.

The more often interest compounds, the higher the APY for the same rate; the converter on this page shows both.

Yes, CDs at FDIC-insured banks are covered up to $250,000 per depositor, per bank, for each account ownership category (credit union share certificates have the same limit through the NCUA). Above that, split deposits across banks or ownership categories.

Both are low-risk. Treasury bill interest is exempt from state and local income tax, which can make a slightly lower Treasury yield worth more after tax if you live in a high-tax state; CD interest is fully taxable by states.

CDs lock in a rate for the whole term, while bills are usually a year or less, so you reinvest at whatever rates are then.