CD Percentage Calculator
Use this calculator to determine the future value, total interest earned, effective annual percentage yield (APY), and the overall percentage gain of a Certificate of Deposit (CD) based on your initial deposit, interest rate, term, and compounding frequency.
Annually
Semi-Annually
Quarterly
Monthly
Daily
Understanding Your CD Percentage
A Certificate of Deposit (CD) is a type of savings account that holds a fixed amount of money for a fixed period of time, and in return, the issuing bank pays you interest. CDs are generally considered low-risk investments because they are FDIC-insured up to certain limits, and their interest rates are fixed for the term.
Key Components of a CD:
- Initial Deposit: This is the principal amount of money you invest in the CD. The larger your initial deposit, the more interest you can potentially earn.
- Annual Interest Rate: This is the stated yearly interest rate the bank offers. It's important to distinguish this from the Annual Percentage Yield (APY), especially when compounding is involved.
- CD Term: This is the length of time your money is locked into the CD, typically ranging from a few months to several years. Longer terms often come with higher interest rates, but your money is less accessible.
- Compounding Frequency: This refers to how often the interest earned is added back to your principal, which then also starts earning interest. The more frequently interest is compounded (e.g., daily vs. annually), the faster your money grows due to the power of compound interest.
How the Calculator Works:
Our CD Percentage Calculator uses the compound interest formula to project the growth of your investment:
A = P * (1 + r/n)^(nt)
A= the future value of the investment/loan, including interestP= the principal investment amount (your initial deposit)r= the annual interest rate (as a decimal)n= the number of times that interest is compounded per yeart= the number of years the money is invested for (CD term)
From this, it calculates:
- Total Value at Maturity: The total amount you will have at the end of the CD term, including your initial deposit and all earned interest.
- Total Interest Earned: The total amount of money you gained from interest over the entire CD term.
- Effective Annual Percentage Yield (APY): This is the actual annual rate of return, taking into account the effect of compounding interest. It's often higher than the stated annual interest rate if compounding occurs more frequently than annually.
- Total Percentage Gain Over Term: This shows the overall percentage increase of your investment from the initial deposit to the total value at maturity.
Example Calculation:
Let's say you deposit $10,000 into a CD with an annual interest rate of 5.00% for a term of 3 years, compounded monthly.
- Initial Deposit (P): $10,000
- Annual Interest Rate (r): 5.00% (0.05 as a decimal)
- CD Term (t): 3 Years
- Compounding Frequency (n): Monthly (12 times per year)
Using the formula:
A = 10000 * (1 + 0.05/12)^(12*3)
A = 10000 * (1 + 0.00416666666)^(36)
A = 10000 * (1.00416666666)^36
A ≈ 10000 * 1.161472
A ≈ $11,614.72
Based on this, the calculator would show:
- Total Value at Maturity: $11,614.72
- Total Interest Earned: $1,614.72
- Effective Annual Percentage Yield (APY): Approximately 5.12%
- Total Percentage Gain Over Term: Approximately 16.15%
This example demonstrates how compounding interest can significantly increase your earnings over time, making the APY and total percentage gain important metrics to consider when choosing a CD.
Please enter a valid initial deposit greater than zero.
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return;
}
if (isNaN(annualRate) || annualRate < 0) {
resultsDiv.innerHTML = 'Please enter a valid annual interest rate (0 or greater).
';
return;
}
if (isNaN(cdTermYears) || cdTermYears <= 0) {
resultsDiv.innerHTML = 'Please enter a valid CD term in years greater than zero.
';
return;
}
var rateAsDecimal = annualRate / 100;
var totalCompounds = compoundingFrequency * cdTermYears;
// Compound Interest Formula: A = P * (1 + r/n)^(nt)
var futureValue = initialDeposit * Math.pow((1 + rateAsDecimal / compoundingFrequency), totalCompounds);
var totalInterestEarned = futureValue – initialDeposit;
// Effective Annual Percentage Yield (APY) formula: APY = (1 + r/n)^n – 1
var effectiveAPY = (Math.pow((1 + rateAsDecimal / compoundingFrequency), compoundingFrequency) – 1) * 100;
// Total Percentage Gain Over Term
var totalPercentageGain = (totalInterestEarned / initialDeposit) * 100;
resultsDiv.innerHTML =
'Total Value at Maturity: $' + futureValue.toFixed(2) + '
' +
'Total Interest Earned: $' + totalInterestEarned.toFixed(2) + '
' +
'Effective Annual Percentage Yield (APY): ' + effectiveAPY.toFixed(2) + '%
' +
'Total Percentage Gain Over Term: ' + totalPercentageGain.toFixed(2) + '%
';
}
// Calculate on page load with default values
window.onload = calculateCDPercentage;