Deposit & Rate
As of August 2026, top 5-year CDs pay around 4.35% to 4.50% APY. The national average is about 1.73% for a 5-year CD.
Term & Compounding
Most CDs compound daily. APY already reflects compounding frequency, so the rate shown is what you actually earn per year.
CD Earnings
Enter your deposit, APY, and term, then click calculate.
Embed This Calculator on Your Website
Add this free calculator to your blog, website, or CMS with a simple copy-paste embed code.
Introduction
CD rates have come down from their 2023 peak, but the top offers in August 2026 still pay up to 4.50% APY while the FDIC national average sits near 2.49% for a one-year CD. That gap is the entire reason to shop around. A $25,000 deposit in a 4.35% five-year CD earns about $6,000 over the term, while the same money in a national-average 1.73% CD earns roughly $2,250. The Federal Reserve cut rates three times in 2025, and banks have been trimming CD yields in response, so locking a multi-year rate now protects you from further cuts. This calculator shows exactly what a CD pays at any APY, term, and compounding schedule, so you can compare offers apples to apples.
What This Calculator Does
This tool calculates the maturity value and total interest on a certificate of deposit from the deposit amount, APY, term in months, and compounding frequency. It reports the average monthly interest, the effective annual rate after compounding, and the final value at maturity. It supports daily, monthly, quarterly, and annual compounding so you can match how a specific bank credits interest.
The Formula
APY already accounts for compounding, which is why banks quote it instead of the simple interest rate. Daily compounding (n=365) produces a slightly higher effective return than monthly (n=12) or annual (n=1), though the difference over a one-year term is small. The formula compounds the principal at each period for the full term. For a $25,000 CD at 4.35% APY compounded daily for 60 months, the maturity value is about $31,050, with roughly $6,050 of interest. The effective annual rate is 4.446%, marginally above the 4.35% nominal APY because of daily compounding.
Step-by-Step Example
Enter the deposit
A saver puts in $25,000, the minimum for a competitive online 5-year CD in August 2026.
Set the APY and term
She enters 4.35% APY and 60 months, matching a top 5-year offer from Sallie Mae or Popular Direct.
Choose compounding
She leaves it on daily compounding, which is standard for most online CDs.
Read the result
Maturity value is about $31,050, total interest is about $6,050, and average monthly interest is roughly $101.
Real-World Use Cases
Locking in rates before further cuts
A retiree with cash sitting in a 0.45% savings account moves $50,000 into a 4.50% 18-month CD to lock the yield before the Fed cuts again, since savings rates fall faster than CD rates once a cycle turns.
CD ladder construction
A saver splits $100,000 across a 1-year, 2-year, 3-year, 4-year, and 5-year CD to balance current yield against reinvestment risk, and uses the calculator to project each rung's maturity value.
Comparing a brokered CD vs bank CD
An investor compares a 4.40% brokered CD against a 4.35% direct bank CD, accounting for the fact that brokered CDs can be sold on the secondary market but carry interest-rate risk if sold before maturity.
Common Mistakes to Avoid
Confusing APY with APR. APY includes compounding and is what you actually earn. APR is the simple rate before compounding. A 4.30% APR compounded daily yields about 4.39% APY. Always compare APY to APY.
Ignoring early withdrawal penalties. A 5-year CD typically charges 12 to 18 months of interest if you break it early. On a 4.35% CD, that can wipe out more than a year of earnings. Know the penalty before you lock.
Forgetting FDIC and NCUA limits. FDIC insurance covers $250,000 per depositor, per bank, per ownership category. A credit union has the same limit under NCUA. If you hold $400,000 at one bank, $150,000 is uninsured.
Chasing yield without reading the fine print. Some 5%+ promotional CDs cap the balance (a credit union offering 9.00% on balances up to $1,000 is not a real yield on real money). Check the minimum, the cap, and the term before you switch banks.
Frequently Asked Questions
Is CD interest taxable?
Yes. CD interest is taxed as ordinary income in the year it is earned, even if you do not withdraw it. For a CD longer than one year, the bank reports interest annually on a 1099-INT. If you are in the 24% federal bracket, a $6,000 interest payout nets about $4,560 after federal tax, before any state tax.
What happens when my CD matures?
Most banks give a 7 to 10 day grace window after maturity. If you do nothing, the CD usually auto-renews into a new term at the bank's current rate, which is often lower than what you can find by shopping. Always check the renewal rate and either withdraw or renegotiate during the grace window.
Are no-penalty CDs worth it?
No-penalty CDs let you withdraw after the first few days without a fee, but they pay about 0.25% to 0.40% less than a standard CD of the same term. They make sense if you might need the money before maturity, but if you are certain you will hold, a standard CD pays more.
Should I pick a shorter term if rates might rise?
In August 2026 the Fed is in a cutting cycle, not a hiking one, so the reinvestment risk on a short CD is that you roll into a lower rate later. A longer term locks the current yield. If you expect rates to rise, a ladder hedges both directions.
How does a jumbo CD differ from a regular CD?
A jumbo CD typically requires $100,000 or more and historically paid a higher rate. In August 2026 the spread has compressed, with some jumbo CDs actually paying less than top standard CDs. Always compare the APY, not the label.
Accuracy and Disclaimer
This calculator computes CD earnings from the inputs you provide using standard compound interest formulas. The August 2026 rate benchmarks referenced are point-in-time market rates that change daily. CD terms, early withdrawal penalties, compounding methods, and insurance limits vary by institution. This is not financial advice or a deposit recommendation. Confirm current APYs, minimums, and penalties directly with the issuing bank or credit union before opening an account.
Conclusion
A CD is only worth locking if the math beats your alternatives. Run the numbers here, then compare against a long-term portfolio with our CAGR Calculator or weigh the liquidity tradeoff with the Emergency Fund Calculator.
Related Personal Finance Calculators
Debt Payoff Calculator (Snowball vs Avalanche)
Compare snowball and avalanche debt payoff methods side by side. See total interest paid, payoff timeline, and monthly payment schedules for up to 10 debts using 2026 average credit card rates.
Use CalculatorPersonal FinanceEmergency Fund Calculator
Calculate your target emergency fund based on monthly expenses, determine how many months of coverage you currently have, and estimate time to reach your 3-6 month savings goal.
Use CalculatorPersonal FinanceSavings Goal Calculator
Determine the monthly contribution needed to reach your savings target by a specific date with compound interest. Track progress and adjust for inflation and tax implications.
Use CalculatorPersonal FinanceNet Worth Calculator
Calculate total net worth from assets and liabilities with category breakdown. Track year-over-year growth, asset allocation percentages, and debt-to-asset ratio for financial health monitoring.
Use CalculatorPersonal FinanceCredit Card Payoff Calculator
Compare minimum payment vs fixed payment strategies on credit card debt. See total interest cost, payoff date, and monthly breakdown using 2026 average APR of 22.3% for cards carrying balances.
Use CalculatorPersonal FinanceMortgage Refinance Break-Even Calculator
Calculate break-even point on mortgage refinance from closing costs (2-6% of loan) vs monthly savings. Determine if refinancing makes financial sense based on how long you plan to stay in the home.
Use CalculatorYou May Also Find Useful
Accounts Receivable Aging Calculator
Analyze accounts receivable by aging bucket, calculate Days Sales Outstanding (DSO), Collection Effectiveness Index (CEI), weighted average age, and estimated bad debt exposure using 2026 industry benchmarks.
Use CalculatorAccounting & BookkeepingDepreciation Calculator
Calculate asset depreciation using straight-line, 200% declining balance, or MACRS methods with full year-by-year schedules, 2026 bonus depreciation (20%), and Section 179 references.
Use CalculatorAccounting & BookkeepingCash Flow to Debt Ratio Calculator
Assess business solvency by calculating the cash flow to total debt ratio, debt service coverage ratio (DSCR), free cash flow, and estimated years to repay debt using 2026 lending benchmarks.
Use Calculator