CD rate calculator. CD interest rate calculator is an effective tool to help determine the total return on a bank certificate of deposit and to compare bank CD rates. Use the CD rate calculator to determine total interest earned over varying periods of time. The CD calculator will quickly and easily perform a variety of CD calculations.

CD Rate Calculator with APY

The CD rate calculator with APY is used to calculate a certificate of deposit interest rate and annual percentage yield (APY).  Savers and investors that are shopping or comparing CD rates can utilize the calculator to calculate the APY which is the actual interest earned per year.

The annual percentage yield on a certificate of deposit measures the total amount of interest paid on an account based on the interest rate and the frequency of compounding.  The annual percentage yield is calculated by financial institutions using the following general formula:

APY = 100 [(1 + Interest/Principal)<sup>365/Days in term) – 1]</sup>

The Principal is the amount of funds deposited in the CD account when the account is opened.
Interest is the total dollar amount of interest earned on the Principal for the term of the account.
Days in term are the actual number of days until the account reaches maturity.

This CD calculator is a great way to compare different CD products quickly and easily.  The calculator will calculate the ending account balance once the CD reaches its maturity date, including all accrued interest earned.  Determining the potential interest earned from a particular CD is helpful in evaluating a myriad of potential investments.  Prospective CD account holders that are especially averse to risk can determine exactly how much their investment will be worth at the end of the term.

Users of the CD rate calculator with APY need to enter in the initial opening deposit, the interest rate advertised by the bank or credit union offering the certificate, and the compounding frequency for the account.  Various different terms can be entered into the calculator along with different rates and renewal options to see which combination of account features works best allows for an individual investors budget and savings needs.

CD Calculator

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.

CD Rate Calculators and the Term of the CD

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.

CD Rate Calculator Uses

Certificate of deposit interest rate calculators or CD rate calculators are used by investors for a variety of purposes.  CD interest rate calculators are most frequently used to calculate the amount of interest earned on a bank CD or the amount of funds that will be returned over a specific time period.

A similar output that can be obtained with the CD rate calculator is the total amount of money that the CD account will hold at maturity assuming none of the interest earned is distributed to the account holder.  This will measure how much a CD will be worth at maturity, regardless of the length of time until maturity.

An online CD calculator can also be employed to calculate a CDs rate of return based on different interest payouts.  For instance, bank CDs are advertised with the APY or annual percentage yield which assumes that the interest remains on the account.  If the interest earned is distributed to the account holder the rate of return will be different from the APY depending upon the CDs interest rate and the return on the interest that is paid to the investor.

The CD rate calculator can be an effective tool to help an investor determine how long they want to hold a CD or the optimal CD term to suit their needs.  By using the CD rate calculator to compare multiple CD terms and interest rates, investors that may have specific financial needs for their capital investment can quickly determine the best rate and term to meet those capital needs.

Of course, the CD interest calculators can be used to compare the difference in return on various CD investments with varying interest rates that may be available from different banks with different terms.

The CD rate calculator is an instrument that can automatically calculate a number of variables based on the inputs from the investor such as the initial deposit amount, time until maturity of the CD as well as the CD interest rate.

Key terms that will be used with the CD rate calculators include:

The Initial CD Deposit – The initial deposit is the amount of money that was first placed into the CD account.

Term of the CD – The total number of months until the CD will mature.

CD Interest Rate – The interest rate is the rate offered by the bank in percentage that will be paid on the deposit that has been placed into the account.  This may be either the published interest rate or the Annual Percentage Rate.  Make sure to enter the correct rate, either as the published rate or APY.

Compounding Frequency – Compounding is the reinvestment of the interest amount so that investor will get interest earned on the CD’s accumulated interest.  The CD rate calculator allows the user to indicate the compounding frequency with which the CD’s interest income is added to the account.  The more frequently this occurs, the sooner the accumulated interest income will generate additional interest.

CD Rate Calculators and Total Interest Earned

The most common use of the certificate of deposit calculator is to find out how much interest is earned on a certificate of deposit during a specific period of time.

Bank CDs come in a variety of terms or maturities that can make it difficult to quickly ascertain exactly how much an investor will have returned in dollars on their investment.  In fact, many of the best CD rates are promotional CDs that are offered as odd month terms such as 7 month CDs and 13 month CDs.  The CD interest rate calculator can be input with any term length or maturity. 

To make calculating the dollar amount returned on a bank CD investment even more difficult to calculate is the variety of dollar amounts that are often invested in these accounts.  Calculating a 10% rate of return on a $10,000.00 investment for a one year period of time can be relatively simple, but calculating the amount returned on a $12,750.00 CD investment with an annual rate of return of 4.35% held for a 7 month period of time can be far more difficult.  CD rate calculators can be input with as little as few dollars to investment amounts in the millions of dollars.

The CD interest rate calculator can quickly find the return on a variety of CD rates, CD terms and investment amounts.  There are only a few components that will need to be input in the CD rate calculator in order to get the correct result regarding the dollar returned on a CD investment.

The first component is the amount of money deposited into the CD account.  The second component is the interest rate that is paid by the bank on the certificate.  The third component is the term of the CD or time until the CD matures.  The final component is the frequency of compounding on the interest earned for the CD.  Compounding is the process of reinvesting the interest amount so that the CD earns additional interest on the CD’s accumulated interest.  The more frequent the compounding the greater the rate of return will be.

For investors that want to calculate a CD rate return, the task can be easily accomplished with an online CD interest calculator.