A certificate of deposit (CD) is one of the simplest ways to earn a guaranteed return: you agree to leave a sum with the bank for a set term, and in exchange you get a fixed, often higher, interest rate. The catch is access — your money is locked in until it matures.
TL;DR — Enter your deposit, the APY and the term in the CD calculator to see the value at maturity and the interest earned.
How a CD earns
A CD pays a fixed rate over a fixed term — three months, a year, five years. Banks quote the APY (annual percentage yield), which already includes the effect of compounding, so the number you see is the real yearly return. Longer terms usually pay more, rewarding you for locking the money up for longer.
The access trade-off
The reason a CD pays more than a regular savings account is that you give up flexibility. Pull the money out before maturity and you typically forfeit several months of interest as a penalty. That makes CDs a good home for money you know you will not need for a while — an emergency fund’s overflow, or savings earmarked for a goal with a known date.
CD laddering
A popular tactic is a CD ladder: split your money across several CDs with staggered maturities — say one, two and three years. As each matures you get access to a chunk of cash (or roll it into a new CD), so you capture higher long-term rates while still having money come available regularly. Run different terms in the CD calculator to compare the payouts.