There are a variety of options for investing in bank certificates of deposit. Banks offer a wide variety of CDs that come with different interest rates and varying maturities. The dilemma for the CD investor is choosing the right bank CD with the best CD rate to match their needs. The CD calculator can help investors with the task in finding the right bank CD for their financial needs

Bank CD investments may have several appealing advantages for investors. Two significant advantages of CD investments is the investor or owner of the CD knows how much the CD will earn and when the money invested will be available to reinvest or use. The amount earned on the CD is established with the CD interest rate and the availability of funds is established based on the term of the CD. With these two figures, the CD interest rate and CD term, the CD calculator can determine the return on a bank CD expressed as a percentage or as an absolute dollar amount.

CD interest rates are quoted by banks with the annual percentage yield. The annual percentage yield represents the compounded return on the CD deposit if held at that annual interest rate for one year. The CD calculator will display the value of the CD investment at the date of maturity based on the initial deposit and the annual percentage yield. The CD calculator can determine the CD value and rate of return if the CD is held for one year or any time horizon the CD calculator user wishes to evaluate.

With a bank CD, longer investment time horizons allow the account holders to take advantage of higher returns. These higher returns are due to the general level of CD interest rates in which longer term CDs pay higher interest rates over shorter term CDs. The spread over CD terms can sometimes be very wide or may be quite narrow. By comparing several different CD terms and CD rates with the CD calculator an investor can ascertain the best rate of return based on their investment time horizon.

The CD calculator can quickly compare the holding period return for multiple CD investment options. The total return from holding the CD investment is based on the CD rate and the specific time of the CD term.

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