The purpose of the CD (Certificate of Deposit) Calculator is to illustrate how much interest a particular CD will earn. To use this tool you will need to enter your initial deposit amount, the number of months the CD will be held for, the interest rate, and how often the interest is compounded. Using this information the calculator will produce the total annual yield, the annual percentage yield, and the ending balance of your investment.

Certificate of Deposit Calculator Overview

Certificate of Deposit (CD) is an investment product that has a fixed interest rate and a fixed maturity rate. If the investor tries to cash in their CD before the CD's maturity date then they are charged early withdrawal fees and penalties. This severely limits the profit margin for the CD, and in some cases it may even create a loss for the investor. These fees are used to discourage early cash outs.

In order to get the best rates possible investors need to first find a financial institution that offers the best interest rates. Next they will need to invest in a CD that has the longest maturity rate available. Finally, in order to get the highest interest rates the investor should invest an amount that is in the highest interest rate tier. Generally the more money you initially invest the higher your interest rate will be.

 

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