Certificate of Deposit Calculators: Rates, Terms and Ladders

A certificate of deposit is a bank or credit union deposit that pays a fixed rate for a set term, such as six months or five years. In exchange for the fixed rate, you agree to leave the money in place until maturity; withdrawing early usually costs a penalty. CDs at insured institutions are covered by federal deposit insurance up to the limits.

For a standard fixed-rate CD, no. The rate is set when you open it and stays the same until maturity, whatever happens to market rates. Some specialty CDs, such as step-up or bump-up CDs, allow rate changes under specific terms. A fixed rate protects you if rates fall and holds you back if they rise.

Each bank sets its own penalty, usually as a number of days or months of interest, and often larger for longer terms. Federal rules set a minimum penalty for withdrawals in the first six days after deposit, but beyond that the account agreement governs. Read the penalty in the disclosure before opening, especially if you might need the money early.

It depends on whether you value access. A single long CD usually earns more if you never need the money early. A ladder earns a bit less at first but has a CD maturing every year, which gives regular access and spreads out the risk of renewing everything when rates are low.

Many CDs renew automatically into a new CD of similar term at the rate the bank offers that day. Banks typically give a short grace period after maturity during which you can withdraw or change terms without a penalty. Mark maturity dates so you can decide in time. The new rate may be higher or lower than your old one.

Not quite. Brokered CDs are issued by banks but bought through a brokerage account, and they can often be sold to another investor before maturity instead of being redeemed early. Their market price can be below what you paid if rates have risen. Deposit insurance can still apply to the underlying bank deposit, subject to the usual limits.

Interest on a CD is generally taxable in the year it is credited or made available to you, not only at maturity. For a multi-year CD that credits interest annually or more often, you will usually owe tax each year. Banks report the interest on Form 1099-INT, and an early-withdrawal penalty can generally be deducted.

Use APY to rank offers fairly, then look at dollars to judge whether the difference matters. A 0.3-point APY gap on $2,000 may be worth only a few dollars a year; on $80,000 it can be worth hundreds. The compare CD rates calculator turns a rate gap into dollars for your deposit and term.