CD Calculator: Interest, APY and Early-Withdrawal Penalty

Name: CD Calculator: Interest, APY and Early-Withdrawal Penalty
Author: Acun Özdilek

This CD calculator shows what a certificate of deposit pays at maturity, from either the APY or the interest rate the bank quotes.

Example numbers

The answerfrom an example

At maturity this CD is worth $10,400.00, of which $400.00 is interest.

Worked on $10,000 at 4% APY for 12 months, 3 months of interest as the penalty. Change anything below to use yours.

Interest earned: $400.00
Interest rate (APR): 3.92%
Early-withdrawal penalty: $98.06

The figures behind it

Interest earned: $400.00; Over 1 year.
Interest rate (APR): 3.92%; The interest rate that, compounded daily, earns 4.00% APY.
Early-withdrawal penalty: $98.06; 3 months of simple interest on the deposit.
If you cash out after 6 months: $10,099.98; $99.98 more than you deposited, after the penalty.
Break-even APY to move the money: 6.03%; A new account must pay more than this for the remaining 6 months to beat keeping this CD to maturity.

Payment scheduleShow

Month	Interest this month	Balance	If you cash out
1	$32.74	$10,032.74	$9,934.68
2	$32.84	$10,065.58	$9,967.52
3	$32.95	$10,098.53	$10,000.47
4	$33.06	$10,131.59	$10,033.53
5	$33.17	$10,164.76	$10,066.70
6	$33.28	$10,198.04	$10,099.98
7	$33.38	$10,231.42	$10,133.36
8	$33.50	$10,264.92	$10,166.86
9	$33.60	$10,298.52	$10,200.46
10	$33.72	$10,332.24	$10,234.18
11	$33.82	$10,366.06	$10,268.00
12	$33.94	$10,400.00	$10,400.00

What this result assumes

With an APY entered, the compounding setting affects only the equivalent interest rate and the penalty, not the balance.
Penalty rules vary by bank. Some count days rather than months, and some charge only on the amount withdrawn. Here the penalty is simple interest on the whole deposit at the CD's interest rate, and it can reduce the deposit itself.
The break-even is before tax. It compares both choices on the date this CD would have matured, and assumes the new rate holds for the whole remaining time.
Figures are before tax. Outside an IRA or other retirement account, CD interest is taxed as ordinary income, and you can enter your marginal rate to see what you keep.

It also turns an early-withdrawal penalty into dollars and finds the rate a new account must beat before breaking the CD pays off.

Methodology

Reviewed October 5, 2026 by Acun Özdilek

APY, the interest rate, and where compounding comes in

APY is what a deposit earns over a year with compounding already counted. The interest rate, sometimes labelled APR, is the rate before compounding. A rate r compounded n times a year gives an APY of (1 + r ÷ n)ⁿ − 1, and when you enter an APY the calculator runs that backwards, which is how a 4% APY compounded daily becomes a 3.92% interest rate.

Once the rate is an APY, the compounding setting no longer moves the balance, because the APY already includes it. It still changes the equivalent interest rate and, through that rate, the penalty.

The balance after a given number of months is the deposit × (1 + APY)^(months ÷ 12), rounded to the cent. To model a balance you keep adding to, use the compound interest calculator.

How the early-withdrawal penalty is worked out

You enter the penalty as months of interest. The calculator charges it as simple interest on the whole deposit at the CD's interest rate: deposit × interest rate × months ÷ 12.

Here the penalty stays the same whenever you cash out. Early in the term it can be larger than the interest earned so far, and the difference then comes out of the deposit itself. The schedule shows what you would get back at the end of each month.

The break-even rate for moving the money

Breaking the CD pays off only if the cash-out value, moved to a new account, grows to more than the CD would have paid by its maturity date. The calculator finds the APY at which the two are equal over the remaining months. A new account has to pay more than that.

It is worked out before tax, from the exact growth rather than the rounded balances, and it assumes the new rate holds for the whole remaining time. The deposit drops out of the sum, so the break-even is the same for any amount.

If the money might pay down a debt instead, the HYSA vs debt paydown calculator compares the two.

Assumptions

The rate is fixed for the whole term.
There is one deposit at the start, with no additions and no partial withdrawals.
Interest stays in the CD and compounds until it matures or is cashed out.
Months are twelfths of a year. Banks count actual days, so a bank's figures can differ a little from these.
The penalty is simple interest on the whole deposit at the CD's interest rate.
Tax, if you enter a rate, is one flat rate on all the interest.

Sources

Common questions

How is CD interest calculated?

The deposit grows at the APY, compounded over the term, so $10,000 at 4% APY for 12 months earns $400.00. If the bank quotes an interest rate instead, the calculator first turns it into an APY using the compounding frequency. To work back from a target amount and date, use the savings goal calculator.

Should I compare CDs by APY or by interest rate?

By APY. It already includes compounding, so two APYs can be compared directly, while two interest rates compounded at different frequencies cannot. A 4% APY compounded daily is a 3.92% interest rate, and a 4% interest rate compounded daily is 4.08% APY.

How much is the penalty for cashing out a CD early?

Each bank sets its own, and the CD's disclosure states it. Some state it as months of interest, some as days, and some charge it only on the amount you take out. This calculator takes the penalty in months and charges it on the whole deposit, so if it is larger than the interest earned so far, you get back less than you put in.

Is it worth breaking a CD to get a higher rate?

Only if the new rate is higher than the break-even. Take $10,000 at 4% APY for 12 months with a penalty of 3 months of interest, which comes to $98.06. Cash out after 6 months and you get $10,099.98. A new account would have to pay more than 6.03% APY for the remaining 6 months to beat keeping the CD to maturity. That comparison is before tax.

Is CD interest taxable, and is the early-withdrawal penalty deductible?

Outside an IRA or other retirement account, CD interest is taxed as ordinary income, and on a CD longer than a year some of it may be taxable each year before the CD matures (IRS Publication 550, “Certificates of deposit and other deferred interest accounts”). In that taxable account, an early-withdrawal penalty can be deducted from income (Publication 550, “Penalty on early withdrawal of savings”). A CD held inside an IRA follows the IRA's rules instead, which this answer does not cover. Publication 550 says: “The rules in this publication do not apply to investments held in individual retirement arrangements (IRAs), section 401(k) plans, and other qualified retirement plans.”

Does a CD keep up with inflation?

Only if its APY, after any tax on the interest, is higher than inflation over the term. The rate is fixed and inflation is not, and every figure here is in nominal dollars. The inflation calculator shows what a maturity balance is worth in today’s money.

All investing →

Result