CD Calculator
Calculate Certificate of Deposit earnings, APY and maturity value for any term.
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Frequently Asked Questions
Are CDs worth it in 2026?
CDs are worth considering when: you have cash you will not need for the CD term, you want guaranteed returns without market risk, and CD rates exceed high-yield savings account rates. In 2026, top CD rates range from about 4.2% to 5% APY (1-year CDs 4.40-4.50%, 5-year up to 4.95%). The trade-off is liquidity — early withdrawal penalties (typically 3-6 months of interest) apply if you need the funds before maturity.
What is a CD ladder strategy?
A CD ladder splits your investment across multiple CDs with staggered maturities. For example: 25% in a 1-year CD, 25% in 2-year, 25% in 3-year, 25% in 4-year CD. As each matures, reinvest in a new 4-year CD. This provides liquidity every year while capturing longer-term rates. It eliminates the risk of locking up all your money when rates later increase.
How is CD interest taxed?
CD interest is taxed as ordinary income in the year it is earned, even if you do not withdraw it (for multi-year CDs, you owe tax on accrued interest annually). This differs from stocks where you control when gains are realized. Consider holding CDs in tax-advantaged accounts (IRA, HSA) if you are in a high tax bracket to defer or eliminate the tax on interest.
CD earnings on $10,000 at 2026 rates
A certificate of deposit pays a fixed rate for a fixed term. Interest usually compounds daily or monthly, so the APY (the yield after compounding) is a little above the stated rate. The table assumes monthly compounding and no early withdrawal.
| Rate | Term | APY | Value at maturity | Interest earned |
|---|---|---|---|---|
| 4.00% | 1 year | 4.07% | $10,407.42 | $407.42 |
| 4.25% | 1 year | 4.33% | $10,433.38 | $433.38 |
| 4.50% | 1 year | 4.59% | $10,459.40 | $459.40 |
| 4.00% | 2 years | 4.07% | $10,831.43 | $831.43 |
| 3.75% | 3 years | 3.82% | $11,188.76 | $1,188.76 |
| 3.50% | 5 years | 3.56% | $11,909.43 | $1,909.43 |
Rates in the table reflect what competitive online banks were offering in autumn 2026; large branch banks pay far less on the same terms. CD interest is taxed as ordinary income in the year it is credited.
Worked example
$10,000 in a 1 year CD at 4.50% compounded monthly: 10,000 x (1 + 0.045/12)^12 = $10,459.40. The APY is 4.59%, which is the number banks advertise and the one to compare between offers, since one bank's 4.50% compounded daily beats another's 4.50% compounded annually by about $10 on $10,000.
The early withdrawal penalty
Breaking a CD before maturity costs a set number of months of interest, typically 3 months on terms up to a year, 6 months on 1 to 3 year terms, and 12 months on 5 year terms. On the 1 year, 4.50% CD above, a 3 month penalty is $112.50; cash out after 2 months and the penalty exceeds the interest earned, so you get back less than you deposited. That is the real risk of a CD, and the reason to keep an emergency fund in a savings account instead.
CD versus high yield savings
A savings account at 4.00% is liquid and its rate can fall any day. A 1 year CD at 4.25% is locked both ways. If rates fall during the year, the CD wins; if they rise, the savings account catches up. In autumn 2026, with the Federal Reserve cutting, locking a rate has been the better bet for money not needed within the term. A ladder (one CD maturing every 3 or 6 months) gives most of the rate with some of the liquidity.
Inverted term rates
In the table the 5 year CD pays less than the 1 year. That is a banks'-eye view of where rates are going: they expect to pay less in future years and price long CDs accordingly. For a saver who believes rates will fall further, a 3 or 5 year CD at 3.5% to 3.75% still beats the 1 year if the 1 year money has to be reinvested at 3% next year.