CD Calculator £ Certificate of Deposit
Calculate the maturity value and interest earned on a Certificate of Deposit. See month-by-month accrual, compare auto-renewal projections, and find the best 2026 CD rates.
📅 CD rates indicative — updated January 2026🏢 Best CD Rates (2026)
Indicative ranges only — verify with institution before depositing.
| Bank | Term | APY | Min Deposit |
|---|---|---|---|
| Bread Savings | 6-month | 5.25% | $1,500 |
| Ally Bank | 6-month | 4.75% | $0 |
| Marcus | 6-month | 4.70% | $500 |
| Bread Savings | 1-year | 5.10% | $1,500 |
| Synchrony | 1-year | 5.00% | $0 |
| Ally Bank | 1-year | 4.80% | $0 |
| Marcus | 1-year | 4.75% | $500 |
| Discover Bank | 18-month | 4.60% | $2,500 |
| Ally Bank | 2-year | 4.40% | $0 |
| Marcus | 2-year | 4.35% | $500 |
| Capital One | 2-year | 4.25% | $0 |
| Ally Bank | 5-year | 4.20% | $0 |
| Marcus | 5-year | 4.15% | $500 |
How CDs Work and When They Make Sense
A Certificate of Deposit (CD) is a time deposit — you agree to leave money with a bank for a set term in exchange for a guaranteed fixed interest rate. All deposits at FDIC-member banks are insured up to $250,000 per depositor, making CDs among the safest investments available. Terms range from 30 days to 10 years, with 6-month, 1-year, and 2-year terms being most popular.
CDs make sense when you have money you won't need for a specific period and want a guaranteed return better than a savings account. Common use cases: an emergency fund layer you want to earn more on, proceeds from a home sale waiting for the next purchase, or a set-aside for a planned major expense in 12–24 months.
CDs are not ideal for: your primary emergency fund (liquidity is critical), money you might need early (penalty wipes out gains), or long-term investing (stock market returns historically exceed CD rates over 10+ year periods).
CD Ladder Strategy: Maximize Returns and Keep Flexibility
A CD ladder solves the liquidity problem by spreading money across multiple terms. Classic 5-rung ladder example with $25,000:
$5,000 into a 1-year CD → matures in 12 months. $5,000 into a 2-year CD → matures in 24 months. $5,000 into a 3-year CD → matures in 36 months. $5,000 into a 4-year CD → matures in 48 months. $5,000 into a 5-year CD → matures in 60 months.
After year one, the 1-year CD matures and you invest in a new 5-year CD. After year two, the original 2-year CD matures — again reinvest in 5 years. After 5 years, all rungs are 5-year CDs renewing annually, so you get a 5-year CD rate with annual liquidity access. You can access one rung per year without penalty.
Short-term ladder variant: use 3-month, 6-month, 9-month, and 12-month CDs for quarterly access. Useful when you expect to need the money within the next year but want to earn more than a savings account.
Frequently Asked Questions
What is the early withdrawal penalty on a CD?
Early withdrawal penalties are set by each bank and vary by term. Typical penalties: CDs under 1 year: 90 days of interest. 1–3 year CDs: 6 months (180 days) of interest. 3–5 year CDs: 9–12 months of interest. If you withdraw very early (before you've earned the penalty amount in interest), the penalty comes out of your principal. Always check the specific penalty before opening — some "no-penalty CDs" exist that allow early withdrawal without fees, usually at slightly lower rates.
How is CD interest taxed?
CD interest is taxed as ordinary income in the year it is credited to your account (or available for withdrawal), not when you receive it at maturity. For multi-year CDs, you'll receive a 1099-INT each year showing the interest credited that year, even if you don't withdraw it. CD interest does not receive the preferential capital gains tax rate. To defer taxes, consider holding CDs inside a Roth IRA or traditional IRA — though this adds complexity and restrictions.
What is a no-penalty CD?
A no-penalty CD (also called a liquid CD) allows early withdrawal without paying a penalty, usually after a minimum holding period (often 6–7 days). These typically pay slightly less than standard CDs of the same term — the rate premium for locking in is lost. In a stable or falling rate environment, a no-penalty CD earning 4.5% APY is strictly better than a HYSA at 4.5% APY, since you get the same rate with the option (but not obligation) to leave. Ally and Marcus both offer competitive no-penalty CD products.
