Savings & CD Interest Calculator

How savings and CD interest works

Choose simple or compound interest, then enter your deposit amount, the interest rate and the term. The calculator shows the interest you will earn, your ending balance and the effective APY.

Formulas

• Simple interest: interest = principal × rate × years.
• Compound interest: ending balance = principal × (1 + r ÷ n)^{n × years}.
• APY: (1 + r ÷ n)ⁿ − 1.

Rates change over time and vary by bank — confirm the current APY and terms with your institution. CD early withdrawals may incur a penalty.

Frequently Asked Questions

What is the difference between APR and APY?

APR (annual percentage rate) is the simple nominal rate. APY (annual percentage yield) includes the effect of compounding within the year, so APY is always equal to or higher than the nominal rate.

How is APY calculated?

APY = (1 + r ÷ n)ⁿ − 1, where r is the nominal annual rate and n is the number of compounding periods per year. Daily or monthly compounding gives a slightly higher APY than annual.

Simple vs. compound interest — which do banks use?

Most savings accounts and CDs compound interest (often daily or monthly) and quote an APY. Simple interest, which is paid only on the principal, is less common for deposits but useful for comparison.

Is CD interest taxable?

Yes. Interest earned on savings accounts and CDs is generally taxable as ordinary income in the year it is credited, and your bank reports it on Form 1099-INT.