# CD Calculator: Compounds Certificate of Deposit

Free CD calculator estimates how much a Certificate of Deposit will yield in compounded interest, based on initial deposit, term length, APY, and compound frequency.

Amount of CD initial deposit (or rollover value)
%
Annual Percentage Yield (APY) of CD

How long money is to stay in CD (until maturity)

Indicate how frequently interest is compounded

## Entry Fields - Compound CD Interest

Starting Amount - Often referred to as principal. This is the initial amount you plan to deposit into the certificate of deposit (CD). If you are rolling over a CD, it is the value of the CD at maturity. You can, of course, what-if calculate with various starting amounts.

APY (Percent) - The annual percentage yield (APY) of the CD. You can use the APY of a CD you are considering, or other values to what-if calculate how much you would make on your principal, if that APY is available.

CD Term - The term length of the CD, which indicates how long your principal is to remain in the certificate of deposit earning interest at the APY rate.

Compound Frequency - How often the financial institution compounds interest on the CD: daily, monthly, quarterly or annually. The shorter the compounding frequency, the more money a CD will make, since compounding enables you to earn interest on interest credited.

To easily see how compounding more frequently results in a higher yield, use the CD Compare Rates Calculator. Simply enter the same initial deposit, term, and APY, and then vary the frequency compounding.

## How is CD Interest Compounded?

The formula used to compound interest is:

Formula: A = P (1 + r/c)^cY

where:

• A = Amount at maturity: Principal + Compounded Interest

• r = APY rate, expressed as a decimal, which is APY/100

• c = compounding times, per year. For example, if compounding is done daily, c is 365, if monthly, c is 12, if quarterly, it is 4, and if annually, it is 1

• Y = term length, based on number of years. Convert to year (e.g. from month) as necessary.