CD Calculator

At 4.75% APY, a $10,000 CD earns about $487 in the first year and about $997 over 2 years with monthly compounding. CD rates are guaranteed for the full term, unlike savings accounts where rates can change.

Early withdrawal penalties vary by bank and term. Typical penalties: 3 months of interest for terms under 1 year, 6 months for 1-year CDs, and 12 months for longer terms. Some online banks offer no-penalty CDs with slightly lower rates.

A CD ladder splits your deposit across multiple CDs with staggered maturity dates (e.g., 1-year, 2-year, 3-year). As each CD matures, you reinvest at the longest term. This balances higher long-term rates with regular access to some of your money.

With rates at 4%–5% APY in 2024, CDs are attractive for risk-averse savers. They are FDIC-insured up to $250,000 and guarantee your rate. CDs are best for money you will not need during the term, such as emergency fund reserves or short-term savings goals.

CDs typically offer slightly higher rates (0.25%–0.50% more) in exchange for locking up your money. Savings accounts offer flexibility to withdraw anytime. If you can commit to a term, CDs guarantee the rate even if market rates drop. If you need liquidity, a high-yield savings account is better.