Setup is simple ; Fixed Rates ; Flexible rates and terms
A certificate of deposit (CD) is a type of savings account offered by banks and credit unions. It pays a fixed interest rate for a set period of time.
Initial deposit, The amount of money you initially deposit into your CD. Usually, you can only make one deposit unless you have an add-on CD. Some banks require a minimum deposit amount to open a CD. ; CD term length, The amount of time you commit to keeping your money in a CD. Common term lengths range between six months and five years. ; Annual percentage yield (APY), This percentage indicates how much interest your money will earn within one year. Banks show the APY as the rate of their CD. ; Compounding frequency, Our calculator can also adjust compounding frequency, which refers to how often your interest earns interest upon itself. CDs with interest compounding daily earn interest quicker than those compounding monthly. If you don’t know how often your CD earns interest, keep the frequency set to monthly. ; Compounded interest, APY includes compounded interest, which accounts for the interest you earn on your interest. CD interest is usually compounded daily or monthly. Our CD interest calculator is compounded monthly to account for your extra savings. Here’s a simplified breakdown of monthly compounding considering a principal deposit of $10,000 and a 4% APY: ; Maturity date, Your CD “matures” when the term ends. If you withdraw money from your CD before it matures, you could face an early withdrawal penalty. The penalty will reduce the amount of interest you earn on your CD. You’ll need to allow the CD to mature untouched for the CD interest calculation to be accurate.
Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate banking products to write unbiased product reviews. If you've got some extra cash and you're wondering where to park it, you've probably looked at savings accounts. You might want to consider a certificate of deposit (CD) if you do not need immediate access...
Learn all about various types of certificates of deposit, how they work and how they potentially fit into your savings and investment planning. Browse Investopedia’s expert-written...
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A certificate of deposit typically earns higher interest than a traditional savings account. View Bank of America CD rates and account options.
Learn more about certificates of deposits and savings accounts, and how to choose the right account for you with our comprehensive guide.
A jumbo certificate of deposit (CD) is a type of savings account with higher balance requirements than a traditional CD. It generally pays a higher interest rate.