CD Calculator

Certificate of deposit maturity value and APY.

Inflation is the quiet adjustment inside every growth figure: a 5% return against 3% inflation leaves 2% of real gain, and that gap compounds slowly. Fees and taxes come out of the return before the saver sees any of it, so a headline yield and a realised one are rarely the same number.

Compounding is the whole story in American saving and investing: interest is credited to the balance and then earns interest itself, so simple and compound growth pull apart with time and with how often interest is credited. Banks quote both an APR and an APY, the second reflecting the compounding frequency.

Present value and future value are the same arithmetic run in either direction.

Certificates of deposit trade liquidity for yield by locking a rate for a fixed term, and the early-withdrawal penalty is usually a few months of interest. The annual percentage yield already includes compounding, so two CDs quoting the same APY pay the same over a year however often interest is credited.

The discount rate standing in for what money could otherwise earn matters more than any other input here: at 7% a sum doubles in about ten years, at 3% in about twenty-four.

Real return is the nominal return minus inflation, and it is the figure that decides whether money grew at all. A taxable account loses a slice of every gain each year, which is why the same fund compounds very differently inside a retirement wrapper.

CD Calculator sits with the rest of the library's finance work, and it rests on the same saving and investing arithmetic the way a lender's disclosure or a bank statement does. Its answer is only as good as the assumptions standing behind it.

The quantities it works from — deposit, apy, term and compounding — are the ones a real saving and investing question actually turns on, and each carries a convention of its own, set out below.

Money questions in America turn on the same few trade-offs: how long a balance is carried, what rate applies to it, and whether the money is being paid down or built up. Inflation sits behind all of them, since a figure that looks generous at today's prices buys less at tomorrow's, and comparisons across decades are made in real, inflation-adjusted terms.

American products also disclose their costs in prescribed ways, from the APR on a consumer loan to the annual percentage yield on a deposit account.