See what a certificate of deposit pays at maturity from its APY or interest rate, the interest after tax, and roughly what breaking it early would cost
Enter the amount you deposit, the CD's rate and its term in months. If the bank quotes an APY (annual percentage yield), leave "Rate is APY" ticked — APY already includes compounding. If it quotes an interest rate, untick it and pick how often interest compounds. The calculator shows the balance at maturity, the interest earned before and after tax, and an estimate of an early-withdrawal penalty stated in months of interest. It assumes interest stays in the CD until maturity and the rate is fixed for the term.
Under the Truth in Savings Act (Regulation DD), APY is the interest a deposit earns in a year including compounding. So a CD's balance at maturity is deposit × (1 + APY)^(months ÷ 12). $10,000 in a 12-month CD at 4% APY earns $400, or $312 after a 22% tax rate. When a bank quotes a rate instead, APY = (1 + rate ÷ n)^n − 1 for n compounding periods a year: 5% compounded daily is 5.13% APY and compounded monthly is 5.12% APY. Compare CDs by APY, not by rate.
The FDIC publishes a monthly national rate for each CD term: the deposit-weighted average across insured banks and credit unions. The September 2026 table (published September 21, 2026) is below, with the interest on $10,000 at that rate and at 4% APY for comparison. Online banks and credit unions often pay well above the national average, which is why it pays to compare. Rates change; check the bank's current APY before you open a CD.
| Term | FDIC national rate (Sep 2026) | Interest at national rate | Interest at 4% APY |
|---|---|---|---|
| 3 months | 1.13% | $28.13 | $98.53 |
| 6 months | 1.41% | $70.25 | $198.04 |
| 1 year | 1.73% | $173 | $400 |
| 2 years | 1.61% | $324.59 | $816 |
| 3 years | 1.36% | $413.57 | $1,248.64 |
| 5 years | 1.38% | $709.31 | $2,166.53 |
Banks usually state the penalty as a number of months of interest — for example 3 months on a 1-year CD and 6–12 months on longer terms. The penalty must be disclosed before you open the account (Regulation DD), and it can be larger than the interest earned so far, which means you can get back less than you deposited. On the example CD, 3 months of interest is about $98.53. Check the account disclosure for the exact formula; some banks charge on the amount withdrawn and others on the whole balance.
CD interest is taxable as ordinary income for the year it is credited to the account, even if you don't withdraw it, and the bank reports it on Form 1099-INT (IRS Topic 403). CDs at FDIC-insured banks are covered up to $250,000 per depositor, per insured bank, for each account ownership category; credit union share certificates have the same coverage through the NCUA. Brokered CDs bought through a brokerage can trade below face value if you sell before maturity.
At 4% APY, $400. At the FDIC's September 2026 national average for 12-month CDs (1.73%), about $173. Interest is taxable in the year it is credited.
Balance at maturity = deposit × (1 + APY)^(months ÷ 12); interest is that balance minus the deposit. If you only have the interest rate, first convert it: APY = (1 + rate ÷ n)^n − 1, where n is the number of compounding periods a year.
No. The interest rate doesn't include compounding; APY does, and banks must show it under Regulation DD. A 5% rate compounded daily is 5.13% APY.
You pay the early-withdrawal penalty in the account agreement, usually a set number of months of interest. If the penalty is more than the interest earned so far, it comes out of your deposit.
CDs at FDIC-insured banks are insured up to $250,000 per depositor, per insured bank, for each ownership category. Credit union certificates are insured by the NCUA on the same terms.
Tax rules, limits and pay data change. Check the current figures with the primary source before acting on them.