Use this CD calculator to determine how much interest you can earn on a bank CD deposit account. The bank CD interest calculator computes the total CD interest earned, using the initial deposit amount, number of months until the CD matures, the CD interest rate and the periodic compounding of interest earned.
Certificates of deposit are federally insured deposits issued by banks, thrifts and credit unions. Bank CD account holders can set aside as little as a few hundred dollars for a period of three months to several years. With the CD investment, account holders can obtain a fixed interest rate, a predictable payout and the safety and security of FDIC insurance. The CD interest calculator helps evaluate the options available in the bank CD market.
The CD calculator requires that the user input the number of months that CD deposit will held, the initial CD deposit amount and the anticipated CD rate on the account. The CD interest calculator allows the user to also choose the frequency that the CD interest is compounded. The more frequently the compounding occurs, the sooner the accumulated earnings will generate additional earnings.
When calculating the interest earned with the CD interest calculator, taxation is not factored into the results. For investors that know they will be paying taxes on the interest from these investments, they may wish to enter your after tax rate of return into the CD interest calculator.
Comparing interest rates and compounding methods on different bank CDs with different CD interest rates, compounding periods and maturities can be confusing. The CD interest calculator evaluates all of these factors to calculate the CD rate of returns and actual interest earned.
Determining the interest earnings on a certificate of deposit can be important for comparing bank CD investments and investment choices for lump sum investments or periodic savings. The bottom line when using these CD calculators is that determining the interest earnings from a particular bank CD is helpful in evaluating potential investment options.