A certificate of deposit rate calculator can be used to perform a number of different functions regarding investments in bank CDs.  One function that can be performed with a CD interest rate calculator is to evaluate the time frame or term an investor may want to hold a bank CD. 

Determining the term to hold a certificate of deposit may appear to be a relatively easy assessment to make.  But with the wide array of CD terms and CD rates to choose from, the bank CD rate calculator can greatly facilitate the decision making process.

Standard bank CDs come in a wide assortment of terms and interest rates.  CD maturities can range from 30 days to 10 years with almost every time frame in between.  Generally, there is an increase in the CD interest rate as the length of the term or maturity increases.  Promotional bank CDs and odd term CDs can have interest rates that are above those found on standard CDs that have longer terms, making the decision on which term to hold a little more challenging.

With a CD rate calculator an investor can use the published interest rate on a bank CD and calculate the annual rate of return for that CD, no matter how long the term is.  The CD interest calculator can also be used to evaluate the different amounts of interest that will be returned over any period of time.  When comparing different maturities, an investor can compare CDs with dissimilar terms and either use the annualized rate of return or make assumptions on future investment rates to compare a shorter term certificate with one that has a longer term and reinvest the capital from the shorter term CD once it matures. 

Comparing the term on dissimilar term CDs does not tell the complete story on the returns available by investing in two different bank CD accounts if one CD has a term of less than one year.  The annualized rate of return or annual percentage rate on a nine month CD assumes that the investment will have that rate of return for a full year.  The CD rate calculator can determine how much interest will be earned during that time which can then be used to compare the prospects of holding multiple CDs with different terms and different

The CD rate calculators can be very effective and efficient tools that can help an investor determine the exact length of time they would like to hold their money in a CD account with a bank.  Use the CD rate calculator to compare the schedule of annual percentage yield and the final balance of the CD when it matures to find the best CD or multiple CDs to match your investment or savings needs.

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