See your total CD return and payout at maturity.
Rate is quoted as
2 years
Common terms
Compounding frequency
$20,000.00 in a 2 years CD at 4.20% APY, compounded daily, grows to $21,715.28 — that’s $1,715.28 of interest, averaging $71.47 per month.
Balance over the term
| Month | Principal | Interest | Balance |
|---|---|---|---|
| At opening | $20,000.00 | $0.00 | $20,000.00 |
| 5mo | $20,000.00 | $345.81 | $20,345.81 |
| 10mo | $20,000.00 | $697.59 | $20,697.59 |
| 14mo | $20,000.00 | $983.39 | $20,983.39 |
| 19mo | $20,000.00 | $1,346.20 | $21,346.20 |
| 2y | $20,000.00 | $1,715.28 | $21,715.28 |
Calculated in your browser using A = P(1 + r/n)nt. Nothing is sent to a server. Figures are before tax; confirm exact terms with your bank.
Formulas and content last reviewed . Bank rates change frequently — confirm current rates directly with your institution.
The short answer
Your CD return is the maturity value minus your deposit, expressed either in dollars or as an annualised rate. Compute the dollars with A = P(1 + r/n)^(nt) − P, and the annualised rate with (A ÷ P)^(1/t) − 1, where t is the term in years. A $20,000 CD at 4.20% APY over 24 months returns $1,715.28. The annualised form matters when you are comparing CDs of different lengths: a three-year CD paying $1,411.66 on $10,000 sounds better than a one-year CD paying $450.00, but both annualise to 4.50% and are therefore the same offer stretched over different periods. Annualising also lets you compare a CD against instruments quoted as yields, such as Treasury bills. What it does not capture is reinvestment risk — what you can earn on the money once the shorter CD matures.
Formula & method
Rate of return = (A ÷ P)^(1/t) − 1
Annualises your total return so CDs of different lengths can be compared.
Find the maturity value with A = P(1 + r/n)^(nt).
Subtract your deposit to get the total dollar return.
For the rate of return, divide the maturity value by the deposit.
Raise that ratio to the power of 1 ÷ term in years.
Subtract 1 and multiply by 100 for an annualised percentage.
Guide
Start with the amount you will lock up and the rate the bank has quoted you.
Returns compound, so a 24-month CD returns more than twice a 12-month CD at the same rate.
The result card separates your original deposit from the earnings, so you can see the return on its own.
The growth chart shows how the return accelerates in the later months as compounding takes hold.
Examples
Inputs
Result
The second year returns $875.28 against the first year's $840 — the extra $35.28 is compounding working on year one's interest.
Methodology
Return is nominal and before tax or inflation. Real return equals the CD rate minus the inflation rate.
The CD is held to maturity; an early withdrawal penalty would reduce the return.
Interest compounds inside the CD rather than being paid out.
Conventions follow Regulation DD (12 CFR 1030), which governs how US institutions disclose APY on deposit accounts. Deposits at insured institutions are FDIC-protected up to $250,000 per depositor, per bank, per ownership category.
Primary sources
Details
A CD's return is contractually fixed, which is what distinguishes it from market investments — you know the payout on day one.
Real return is what matters for purchasing power: a 4.2% CD during 3% inflation returns roughly 1.2% in real terms.
Returns on CDs are taxed as ordinary income, not at the lower long-term capital gains rate.
Longer terms usually pay more, but they also lock you out of higher rates if rates rise — that is the trade-off a ladder solves.
How it connects
Applications
You have a target amount for a down payment or a purchase and need to know if the CD gets you there.
You are weighing the guaranteed CD return against bonds or a money market fund.
You need a predictable payout figure to plan against, with no market risk attached.
Related tools
FAQs
You calculate a CD's return by finding the maturity value with A = P(1 + r/n)^(nt), then subtracting your deposit for the dollar return, and for an annualised percentage, computing (A ÷ P)^(1/t) − 1 with t as the term in years. A second, annualised figure is useful because dollar returns alone do not show whether the CD is a good rate or simply a large deposit held for a long time — a $20,000 CD held for two years shows a bigger dollar return than a $2,000 CD held for one year at a better rate, even though the second CD is the stronger offer. On a $20,000 deposit at 4.20% APY over 24 months, the maturity value is $21,715.28, so the dollar return is $1,715.28, and because 4.20% is already quoted as APY, the annualised return equals that same 4.20% regardless of the two-year term. Return figures here are pre-tax; CD interest is taxed as ordinary income in the year it is credited.
Security & privacy
Uses the same compound interest and APY conventions as banks under Regulation DD.
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A CD's return is fixed the day you open it. See exactly what you will walk away with at maturity.