A trade of flexibility for a guaranteed rate
Unlike a market investment, a CD's return is locked in and guaranteed — the trade-off is your money isn't accessible without a penalty until the term ends. For comparison against an investment with growth potential, see the Compound Interest Calculator.
Frequently asked questions
How does a CD earn interest?
A Certificate of Deposit locks a lump sum for a fixed term at a fixed rate, compounding over that period — in exchange for the fixed term, CDs often pay more than a regular savings account.
What happens if I withdraw early?
Most CDs charge an early-withdrawal penalty, often several months of interest — only lock money you won't need before the term ends.
Is the rate here APY?
Enter it as a nominal annual rate compounded monthly, consistent with the rest of this site's calculators — your bank's quoted APY may be very slightly higher since it already reflects compounding.
Last updated: June 2026