How to use this calculator
- Enter the amount you are putting in the CD and its term in months: 12 for a 1-year CD.
- Enter the rate from the CD offer or your account disclosure. It is read as the annual percentage yield (APY). If your disclosure gives an interest rate instead, choose "Interest rate" and its compounding under More options.
- To see what taking the money out early would cost, tick "Breaking it early" and enter the penalty from your disclosure, in days or months of interest, and whether it is figured on your deposit or on the balance.
- To see what you would keep after tax, tick "After tax" and enter your filing status, your other income for the year and your state's rate. Tick a Treasury bill, a savings account or a municipal bond to compare it with the CD over the same months.
The numbers already filled in are an example, including the comparison rates. Replace them with the rates you are offered.
How it's calculated
1. Interest left in the CD
With an APY A, a deposit P is worth P × (1 + A)t/12 after t months. That is the federal rules' APY formula for a certificate of deposit solved for the interest, with each month a twelfth of a year. On the example, $10,000 at 4.00% APY for 12 months is $10,400.00 at maturity: $400.00 of interest.
With an interest rate i compounded n times a year, interest builds each day at 1/365 of the rate and is added to the balance at each compounding date, so the days since the last one earn simple interest until maturity. After k whole compounding periods and a fraction f of the next, the balance is P × (1 + i/n)k × (1 + f × i/n). Daily compounding uses 365 days in every year. 4% compounded monthly gives $407.42 on the example; compounded daily, $408.08.
2. The APY and the interest rate
An interest rate i compounded n times a year is an APY of (1 + i/n)n − 1, and an APY A is an interest rate of n × [(1 + A)1/n − 1]. The APY is shown rounded to two decimals, as banks must show it, and the interest rate to three. An APY of 4.00% is an interest rate of 4.000% compounded yearly and 3.922% compounded daily. With an APY entered, the compounding frequency does not change the interest, only the interest rate behind it and so the penalty.
3. Interest paid out
Interest sent to you along the way does not compound: the interest through month t is P × r × t/12 at the rate you enter, and the CD returns your deposit at maturity. On the example, that is $400.00 paid to you over 12 months.
4. Breaking it early
The penalty is simple interest at the interest rate for the days or months your disclosure states, on your deposit or on the balance at the time: Q × i × N/365 for N days, or Q × i × N/12 for N months. What you get back is your deposit plus the interest earned so far, less the penalty. On the example, breaking after 6 months with 90 days of interest on the deposit costs $10,000 × 4.000% × 90/365 = $98.63, against $198.04 earned by then, so you would get back $10,099.41. From month 4 on, the interest earned covers the penalty. Compounded daily, the same APY means a slightly lower interest rate, and the penalty is $96.71.
Moving the money pays off at an APY x when what you take out, W, grows to at least what staying would pay: W × (1 + x)m/12 ≥ the maturity value, where m is the months left. The rate shown is the smallest whole hundredth of a percent that passes, up to 20%. Here W is $10,099.41 and staying pays $10,400.00, so a new account has to pay 6.05% APY or more for the last 6 months. That is the opportunity cost of staying, set against the penalty.
5. After tax
Interest is taxed in the 12 months it is earned: months 1 to 12, 13 to 24 and so on, and a last part year. For each period, the federal tax is the tax on your whole return with that interest less the tax without it, with the standard deduction. So it counts your bracket, Social Security made taxable, gains pushed into a higher rate, the senior deduction and, above its threshold, the 3.8% net investment income tax.
The federal tax uses the IRS tax rate schedules and is figured to the cent. Below $100,000 of taxable income your return uses the IRS Tax Table instead, which moves in $50 rows (narrower below $3,000), so the tax shown here can differ by a few dollars from your return's figure, or from a calculator that figures your whole return's tax. Figured the Table's way, a few hundred dollars of interest could be taxed several dollars more or less than its share, enough to change a close ranking.
State tax is your rate times the interest, except on a Treasury bill, whose interest is exempt from state tax, and on a municipal bond you mark as exempt from your state's tax. A municipal bond's interest is free of federal income tax whatever your state does, but it still counts toward the share of your Social Security that is taxed, so with benefits it can raise your federal tax.
A Treasury bill is entered by its investment rate j and its length d in days, which Treasury's own formula turns into growth of 1 + j × d/365 per bill (the 52-week bill has its own formula), rolled over for the whole term. A municipal bond's yield y compounds twice a year: (1 + y/2)2t/12. A savings account grows at its APY like the CD.
What each option keeps is its interest less every tax on it, and the options are ranked by that amount. The after-tax yield is the yearly rate that amount is on your deposit: (1 + kept ÷ P)12/T − 1 for a term of T months. Beside a Treasury bill or a municipal bond, the page shows the CD APY that would keep as much, its tax-equivalent yield on your own return. With the numbers filled in, single with $90,000 of other income in 2026, the CD's $400.00 adds $88.00 of federal tax and keeps $312.00, an after-tax yield of 3.12%. At a 5% state rate, a 26-week bill at 4.35% keeps $343.00 against the CD's $292.00: The Treasury bill keeps the most: $343.00, $51.00 more than the CD.
Assumptions and limits
- A month is a twelfth of a year. Banks count actual days, and a 6-month term runs 181 to 184 days: on $10,000 at 4.00% APY that moves the interest by about $1.65 either way. A bank's own APY need only be within 0.05% of the exact figure.
- The rate is fixed for the whole term, and the CD is held to maturity unless you break it. A savings account's rate can change at any time; it is shown as if it held for the whole term.
- Interest paid out is simple interest at the rate you enter. If your CD pays out its interest and its disclosure gives an APY above its interest rate, enter the interest rate.
- The penalty is simple interest at the interest rate, on your deposit or the balance, for the days or months you enter. If your bank uses another method, such as a flat fee, the result is an estimate. A bank may waive it in some cases, such as the owner's death. The penalty is shown before tax; it is deductible, and taxing it at the same rate as the interest would not change the rate that makes moving pay off.
- Moving the money assumes the new account's APY holds for the rest of the term and its interest stays in it.
- Treasury bills are rolled into new bills at the same investment rate for the whole term, and a term that is not a whole number of bills is treated as if the rate applied to the fraction. The investment rate uses a 365-day year; Treasury uses 366 when the year after the issue date includes February 29, which lowers the growth slightly. Bills issued from March 1, 2027 through February 29, 2028 have their investment rate figured on a 366-day year, so a rate taken from one of those auctions overstates the bill's growth here by about 1/365 of the rate: about 0.012 percentage point at 4.35%. A bill longer than the CD is shown as if its rate applied for the CD's term.
- Municipal bonds are held to maturity with interest reinvested at their yield. Price changes before maturity, call risk, private-activity bonds subject to the alternative minimum tax and market discount are not included. Use comparable yields: this is not a bond-pricing calculator.
- Each 12 months of the term is taxed as one year under the selected year's federal law, on top of the same other income, benefits and gains, so a deduction that ends in a later year, such as the senior deduction after 2028, is still applied. A CD or bill that pays within a year is taxed in one year here even if it spans two calendar years. The tax uses the standard deduction, no itemized deductions and no credits; the alternative minimum tax and the earned income credit's investment income limit are not included. A married person filing separately is taken to have lived with their spouse.
- State income tax is one rate you enter. It leaves out higher state brackets a large amount can cross, and local income taxes, and deducting it on your federal return is not included.
- It does not cover CD ladders, bump-up, step-up, callable or no-penalty CDs, brokered CDs (which are sold at the market price rather than broken), variable rates, partial withdrawals, CDs inside an IRA (whose interest is not taxed each year), I bonds and savings bonds, Treasury notes and bonds, inflation, FDIC or NCUA coverage limits, fees, or a national average rate to compare with.
Input field details
What to enter in each box, where to find the number, and how this calculator treats it. When two calculators give different answers from the same numbers, it's usually because they handle one of these differently.
Deposit
The amount you put in the CD when you open it, in whole dollars.
Where to find itThe CD offer, or the opening deposit on your account statement.
How this tool treats itInterest is figured on this amount from the day the CD opens to the day it matures.
Allowed range$100 to $10,000,000
Term in months
How many months until the CD matures: 12 for a 1-year CD, 60 for a 5-year CD.
Where to find itThe CD offer or your account disclosure.
How this tool treats itEach month counts as a twelfth of a year. Banks count actual days, and a 6-month term runs 181 to 184 days, so a bank’s figure can differ from this one by a little: about $1.65 either way on $10,000 at 4.00% APY for 6 months.
Allowed range1 to 120 months
Rate
The rate the bank quotes for the CD, up to three decimals. It is read as the annual percentage yield (APY) unless you change “The rate is” under More options.
Where to find itThe CD offer or your account disclosure, which must state both the APY and the interest rate.
How this tool treats itThe APY already includes compounding: a year’s interest is the APY times your deposit. The interest rate is the rate before compounding. The results show both, the APY to two decimals and the interest rate to three.
Allowed range0% to 20%
The rate is
APY if the rate you entered is the annual percentage yield; Interest rate if it is the rate before compounding.
Where to find itYour account disclosure must state both, using those terms. The APY is the same as the interest rate or higher.
How this tool treats itWith an APY, the compounding you choose changes only the interest rate behind it and the early withdrawal penalty, not the interest. With an interest rate, the compounding decides the interest.
Compounds
How often the bank credits interest to your CD.
Where to find itYour account disclosure, often under “compounding and crediting”.
How this tool treats itInterest builds every day at 1/365 of the interest rate, and starts earning interest once the bank credits it, so the days between the last crediting and maturity earn simple interest. This calculator uses 1/365 in every year; a bank may use 1/366 in a leap year, which earns slightly less.
Interest
Stays in the CD if the bank adds the interest to your balance; Paid out to you if it sends the interest to you along the way, for example into a checking account each month.
Where to find itYour account disclosure, or the choice you made when you opened the CD.
How this tool treats itInterest paid out does not compound: it is simple interest at the rate you entered, and the CD returns your deposit at maturity. If your disclosure gives such a CD an APY above its interest rate, enter the interest rate.
Breaking it early
Tick it to see what taking the money out before maturity would cost.
How this tool treats itYou see the penalty, what you would get back, the first month you would get back at least your deposit, and the APY a new account would have to pay for the rest of the term before moving the money pays off.
Not includedA brokered CD, which is sold at its market price rather than broken, and a partial withdrawal.
Break after (months)
How many months after opening the CD you would take the money out.
How this tool treats itIt has to be before maturity: a month at or past the term is read as the month before it, and a 1-month CD has no earlier month.
Allowed range1 to 119 months
Penalty
The early withdrawal penalty in your account disclosure, as a number of days or months of interest, such as 90 days or 3 months.
Where to find itYour account disclosure, which has to state the penalty and how it is figured.
How this tool treats itSimple interest at the interest rate, not the APY, on your deposit or on the balance then, for the days or months you enter, rounded to the cent. When the penalty is more than the interest earned so far, the rest comes out of your deposit. A penalty above 36 months is read as 36. A bank may waive it in some cases, such as the owner’s death.
Allowed range0 to 1,095 days, or 0 to 36 months
Not includedA flat fee or another method: if your bank uses one, the result here is an estimate.
Penalty in
Whether your disclosure states the penalty in days or in months of interest.
How this tool treats itA month of interest is a twelfth of a year’s interest; a day is 1/365.
Figured on
Your deposit if the penalty is figured on the amount you put in; The balance then if it is figured on the balance with its interest.
Where to find itYour disclosure says which. If it does not, ask the bank.
How this tool treats itWith interest paid out to you, no interest stays in the CD, so both give the same penalty.
After tax
Tick it to see what you keep after federal and state income tax, and to compare the CD with a Treasury bill, a savings account or a municipal bond.
How this tool treats itInterest is taxed in the 12 months it is earned, each period on top of your other income for the year, and the options are ranked by what you keep. A CD of more than a year has part of its interest taxed each year even though it is paid at maturity.
Not includedA CD inside an IRA or another retirement account, whose interest is not taxed each year.
Filing status
The filing status you will use on your federal return.
Where to find itThe filing status checked on your Form 1040.
How this tool treats itA qualifying surviving spouse uses the joint rate schedule and standard deduction. Married filing separately is taken to have lived with your spouse during the year, which sets the Social Security base amount to $0.
Other income this year
Your income for the year before deductions: wages, pensions, IRA withdrawals and other taxable income. Leave out Social Security, the dividends and gains asked for separately, and this CD’s interest.
Where to find itYour pay stubs and statements, or last year’s Form 1040 as a starting point.
How this tool treats itThe tax on each option’s interest is the tax on your return with the interest less the tax without it. So it counts your bracket, Social Security made taxable, gains pushed into a higher rate, the senior deduction and the net investment income tax. The standard deduction is used; itemized deductions and credits are not.
Allowed range$0 to $10,000,000 a year
Social Security benefits
Your Social Security benefits for the year, before Medicare premiums are taken out. On a joint return, both spouses’ together.
Where to find itBox 5 of Form SSA-1099.
How this tool treats itInterest can make more of your benefits taxable, up to 85% of them. Municipal bond interest counts toward that, though it is not taxed itself.
Allowed range$0 to $200,000 a year
You are 65 or older
Tick it if you are 65 or older by the end of the tax year.
How this tool treats itIt adds the additional standard deduction and, from 2025 through 2028, the senior deduction of $6,000, which phases out as modified AGI rises above $75,000 ($150,000 on a joint return). Interest that raises your AGI in that range shrinks it, and that counts in the tax on the interest.
Spouse is 65 or older
On a joint return, tick it if your spouse is 65 or older by the end of the tax year.
How this tool treats itIt adds your spouse’s additional standard deduction and senior deduction, as for you.
State income tax rate
Your state’s income tax rate on your top dollars of income, which is the rate this extra income would be taxed at. Leave it at 0 to leave state tax out.
Where to find itYour state’s rate table for your filing status, at your income. It is usually higher than your average rate, which is last year’s state tax divided by your income.
How this tool treats itApplied to each 12 months of the CD’s and the savings account’s interest, and to a municipal bond’s when it is not exempt from your state’s tax. A Treasury bill’s interest is exempt from state income tax under federal law, so the rate is never applied to it; at 0, that exemption is worth nothing here.
Allowed range0% to 15%
Qualified dividends and long-term gains
The qualified dividends and net long-term capital gains you expect this year.
Where to find itBox 1b of your Forms 1099-DIV, and your brokerage’s report of realized gains.
How this tool treats itThey are taxed at 0%, 15% or 20%, stacked above your other income, so interest can push some of them into a higher rate. The tax on that counts against the interest.
Allowed range$0 to $10,000,000 a year
Treasury bill
Tick it to compare Treasury bills held for the same months, each rolled into a new bill when it matures.
How this tool treats itTreasury bill interest is taxed federally but not by your state.
Treasury bill investment rate
The bill’s investment rate, not its discount rate.
Where to find itTreasury’s auction results show both for each bill; use the one labeled investment rate.
How this tool treats itConverted for the bill’s length with Treasury’s own formulas, on a 365-day year, and rolled over at the same rate for the whole term. The rate filled in is an example, not today’s rate.
Allowed range0% to 20%
Bill length
The bill’s term: 4, 6, 8, 13, 17, 26 or 52 weeks.
How this tool treats itA bill longer than the CD’s term is shown as if its rate applied for the term.
Savings account
Tick it to compare a savings account at its APY for the same months.
How this tool treats itA savings account’s rate can change at any time; it is shown as if it held for the whole term.
Savings account APY
The APY the savings account pays now.
Where to find itThe bank’s rate page or your latest statement.
How this tool treats itGrown at that APY, its interest staying in the account. The rate filled in is an example.
Allowed range0% to 20%
Municipal bond
Tick it to compare a municipal bond held to maturity over the same months.
How this tool treats itIts interest is free of federal income tax, but it counts in the Social Security worksheet, so it can make more of your benefits taxable.
Municipal bond yield
The bond’s yield to worst, if your quote gives one; otherwise its yield to maturity.
Where to find itYour broker’s quote for the bond.
How this tool treats itRead as a yield compounded twice a year, with interest reinvested at the same yield. The CD rate it is worth is shown beside it. Use comparable yields: this is not a bond-pricing calculator.
Allowed range0% to 20%
Not includedPrice changes before maturity, call risk, private-activity bonds subject to the alternative minimum tax, and market discount.
Exempt from my state’s tax
Leave it ticked if the bond’s interest is exempt from your state’s income tax.
Where to find itBonds from your own state usually are; the bond’s official statement or your broker can confirm it.
How this tool treats itUntick it and your state rate is applied to the bond’s interest.
Questions
How is CD interest calculated?
What is the difference between APY and the interest rate?
How much is a CD early withdrawal penalty, and can it take part of my deposit?
Is it worth breaking a CD to get a higher rate?
Is CD interest taxable, and when?
Are Treasury bills better than CDs after tax?
Version history
- October 30, 2026 (version 1.0.0): First version: a CD's interest by APY or interest rate, breaking it early with the penalty and the rate that makes moving pay off, and what it keeps after tax beside a Treasury bill, savings account or municipal bond.