Enter your deposit, rate and term to see the interest your CD earns in the first month, on average each month and in total, whether the interest compounds or is paid out to you.
With an interest rate r compounded n times a year, the balance after t years is P × (1 + r/n)n·t, and the interest is that balance minus the deposit. For $10,000 at an example 4.00% APR compounded monthly for 6 months: 10,000 × (1 + 0.04/12)6 − 10,000 = $201.67.
Two more examples at example rates: $25,000 at 4.50% APR compounded daily for 24 months earns $2,354.21, and $10,000 at 4.00% APR compounded quarterly for 36 months earns $1,268.25. For value at maturity, use the CD calculator.
Daily vs monthly vs quarterly compounding
The more often interest compounds, the more of it earns interest of its own. The gap is small, because each extra step adds interest on a very small amount. Here is $10,000 at an example rate of 4.00% APR for 12 months:
$10,000 at an example 4.00% APR for 12 months
Compounding
Interest
Value at maturity
Daily
$408.08
$10,408.08
Monthly
$407.42
$10,407.42
Quarterly
$406.04
$10,406.04
Annually
$400.00
$10,400.00
If your disclosure gives an APY, enter that instead: it already includes the compounding. The APY calculator shows the APY for each frequency.
Monthly interest: compounded or paid out
Some CDs add the interest to the balance, where it compounds. Others pay it out to you, for example to a checking account, and then it does not compound. Paid-out interest is I = P × r × t, or P × r ÷ 12 each month.
For $10,000 at an example 4.00% APR paid out monthly, that is $33.33 a month and $400.00 over 12 months.
Frequently asked questions
Is CD interest compounded daily or monthly?
It depends on the account, and the disclosure says which. Daily compounding gives slightly more: on $10,000 at an example 4.00% APR over a year, daily compounding earns $408.08 and monthly compounding earns $407.42.
How to calculate monthly interest earned on a CD?
For the first month, multiply the deposit by the rate and divide by 12: $10,000 × 4.00% ÷ 12 = $33.33 at an example rate. With compounding, later months earn slightly more, because the balance grows.
How much interest does a CD earn?
It depends on the deposit, the rate, the term and the compounding. The balance is P × (1 + r/n)n·t, or P × (1 + APY)t if you use the APY, and the interest is the balance minus the deposit. Enter your own numbers in the calculator above.
Is CD interest taxable?
In the US, CD interest is generally taxable in the year it is credited to you. This site does not model taxes and this is not tax advice; check with a tax professional.