Certificate of Deposit Return Calculator

Calculate the future value of a certificate of deposit (CD) based on principal amount, interest rate, and term length.

Input Parameters

Calculation Results

Calculation Formula

A = P × (1 + r/n)^(nt)

Where:
A = Future Value of CD
P = Principal Amount
r = Annual Interest Rate (as a decimal)
n = Number of times interest is compounded per year
t = Number of years the money is invested

Future Value:

$1,000.00

Total Interest Earned:

$25.00

Total Return:

2.5%

Certificate of Deposit Return Calculator Calculator Usage Guide

Learn how to use the Certificate of Deposit Return Calculator and understand its working principles

How to Use This Calculator

  1. Enter your principal amount (the initial investment in your CD)
  2. Input the annual interest rate offered by your CD
  3. Specify the term length for your CD
  4. Choose how frequently interest is compounded (monthly is most common)
  5. Click the "Calculate" button to see your potential returns

Understanding Certificate of Deposit Returns

A Certificate of Deposit (CD) is a savings product offered by banks with a fixed interest rate and maturity date. Your money earns interest during the term, which is typically locked in at the beginning.

Key Terms Explained

  • Principal Amount: The initial amount of money you deposit into the CD
  • Interest Rate: The percentage of your principal that the bank pays you as interest
  • Term Length: The duration for which you commit your money to the CD
  • Compounding Frequency: How often interest is calculated and added to your account (more frequent compounding results in higher returns)

Example Scenario

For example, if you invest $5,000 in a CD with a 3% interest rate for 2 years, compounded monthly, your future value would be approximately $5,306.16, earning $306.16 in interest.