Splitting your money across CDs of staggered maturities — say 1, 2, 3, 4, and 5 years — so a portion matures every year. You capture longer-term rates while keeping regular access, and reinvest each rung at current rates as it matures.

CD Calculator

Q: How much does a CD earn?

Principal × APY, compounded to maturity. A $10,000 CD at 4.5% APY earns about $450 in one year, $921 over two years, and $1,412 over three, if interest stays in the CD.

Q: What happens if I withdraw a CD early?

You pay an early-withdrawal penalty, commonly 3-12 months of interest depending on the term. On short holding periods the penalty can exceed earned interest and eat into principal, so match the CD term to money you truly won't need.

See exactly what a certificate of deposit will be worth at maturity — with interest compounded at your bank's schedule and the APY conversion handled for you.

Value at maturity

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Interest earned

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Effective APY

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Equivalent monthly income

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How CD interest compounds

Value = Deposit × (1 + r/n)^n·t · APY = (1 + r/n)ⁿ − 1

Worked example

$10,000 in a 12-month CD at 4.5%, compounded monthly:

Value = 10,000 × (1 + 0.045/12)¹² = $10,459 → APY ≈ 4.59%

CDs vs. high-yield savings vs. laddering

A CD pays a premium for a promise: your rate is locked, but so is your money — early withdrawals typically cost 3–12 months of interest. That makes CDs best for money with a known future date (a car purchase, tuition, a house down payment). If you might need the cash unpredictably, a high-yield savings account is safer even at a slightly lower rate. The classic middle path is a CD ladder — equal amounts in 1- through 5-year CDs, reinvesting each as it matures — which earns long-term rates while freeing up a rung every year. Compare all three against your timeline before locking in, and mind FDIC limits ($250,000 per depositor, per bank).

Frequently asked questions

How much does a CD earn?

$10,000 at 4.5% APY: about $450 in 1 year, $921 in 2, $1,412 in 3 (interest left to compound).

What happens if I withdraw a CD early?

A penalty of typically 3–12 months' interest — early exits can eat principal on short holds.

What is a CD ladder?

Staggered maturities (1–5 years) so a rung matures annually — long-term rates with yearly access.

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Note: Assumes interest remains in the CD to maturity. Rates and penalty terms vary by institution. Not financial advice. Last reviewed: July 2026.