Do CDs compound daily or monthly?

Most US banks compound CD interest daily on a 365-day basis, then credit it to the account monthly or quarterly. Credit unions more often compound quarterly. The rate sheet or the Truth in Savings disclosure states both the compounding method and the crediting schedule, and Regulation DD requires the bank to disclose them.

How much more does daily compounding actually earn?

On a $25,000 CD at 4.25% for one year, daily compounding pays $22.84 more than annual compounding and $1.89 more than monthly. Over five years the daily-versus-annual gap grows to $135.11. It is real money but it is smaller than the gap between two banks' rates almost every time.

Does compounding frequency change my APY?

It changes the APY implied by a nominal rate, yes. A 4.25% APR compounds to 4.3413% APY daily, 4.3338% monthly and 4.3182% quarterly. If the bank quoted you an APY to begin with, the frequency has already been applied and switching it here will not change your payout.

Is CD interest simple or compound?

Standard CDs compound. The exception is a CD set to pay interest out to a linked account each month — once the interest leaves the CD it stops earning, so the account behaves like simple interest. Savers who want monthly income choose this deliberately; anyone maximising the maturity value should leave interest in the CD.

What is the formula for compound interest on a CD?

A = P(1 + r/n)^(nt). P is the deposit, r the nominal annual rate as a decimal, n the number of compounding periods per year and t the term in years. Subtracting P from A gives the interest earned. Every figure on this page comes from that one expression.

CD Compound Interest Calculator

See what daily, monthly and quarterly compounding are worth.

See what daily, monthly and quarterly compounding are actually worth on the same CD — usually less than the rate difference between two banks.

만기 시: US$30,783.67
이자: US$5,783.67

내 예금증서

예치 금액

이자율

이자율 표시 방식

기간

개월

5 년

일반적인 기간

복리 주기

만기 금액: US$30,783.67
총 이자 수익: US$5,783.67
실효 APY: 4.25%

5 년 예금증서에 US$25,000.00, 금리 4.25% APY, 일 복리 복리로 US$30,783.67까지 증가 — 이자 US$5,783.67, 월평균 US$96.39입니다.

기간 중 잔액

원금이자

수치를 표로 보기

기간 중 잔액
개월	원금	이자	잔액
개설 시	US$25,000.00	US$0.00	US$25,000.00
1y	US$25,000.00	US$1,062.50	US$26,062.50
2y	US$25,000.00	US$2,170.16	US$27,170.16
3y	US$25,000.00	US$3,324.89	US$28,324.89
4y	US$25,000.00	US$4,528.70	US$29,528.70
5y	US$25,000.00	US$5,783.67	US$30,783.67

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.

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공식과 내용 최종 검토일 2026년 7월 21일. 은행 금리는 자주 바뀝니다. 현재 금리는 거래 기관에 직접 확인하십시오.

짧은 답변

How does compound interest work on a CD?

CD compound interest is calculated with A = P(1 + r/n)^(nt), where n is how many times a year the bank credits interest — 365 for daily, 12 for monthly, 4 for quarterly. Each credit joins the principal and earns interest for the rest of the term, which is why the same nominal rate produces a different maturity value at each frequency. The gap is real but small, and most savers overweight it. A $25,000 CD at 4.25% for one year matures at $26,085.34 compounded daily against $26,062.50 compounded annually — $22.84 apart. Stretch that to five years and the gap widens to $135.11, because the effect is cumulative. What matters far more is which number the bank quoted you. If the 4.25% is an APY it already contains the compounding, and switching the frequency changes nothing about your payout; if it is a nominal APR, the frequency is what turns it into the yield you actually receive.

공식과 방법

계산 방법

A = P(1 + r/n)^(nt)

Compounding frequency enters only through n. Everything else is the standard CD growth formula.

A: Maturity value after compounding
P: Principal — your opening deposit
r: Nominal annual rate as a decimal (4.25% → 0.0425)
n: Credits per year — daily 365, monthly 12, quarterly 4, annual 1
t: Term in years (60 months → 5)

단계별 계산

1
Divide the nominal rate by n to get the rate applied at each credit.
2
Add 1. This is the growth factor for a single compounding period.
3
Raise it to the power n × t — the number of credits across the whole term.
4
Multiply by the principal for the maturity value.
5
To isolate the compounding effect, run the same figures at n = 1 and subtract.

가이드

이 계산기 사용법

네 가지 값만 넣으면 결과가 바로 나옵니다. 제출할 것도, 가입할 것도 없습니다.

1
Enter the deposit and the nominal rate
Use the bank's rate sheet. Set the toggle to APR if the figure is a nominal rate — compounding frequency only changes the answer when the input is an APR.
2
Set the term
Compounding is cumulative, so the frequency matters more the longer the term. On anything under a year the difference is usually pennies on a five-figure deposit.
3
Switch the compounding control
Move between daily, monthly and quarterly and watch the maturity value and effective APY update. That movement is the entire value of the frequency.
4
Compare against the rate gap
Note the dollar difference, then compare it to what a 0.10% higher rate at another bank would pay. The rate almost always wins.

예시

계산 예시

실제 숫자로 끝까지 풀어 본 예시입니다. 직접 넣으신 값과 대조해 계산기가 맞는지 확인해 보십시오.

The same $25,000 one-year CD at 4.25% nominal, credited at three different frequencies

Deposit: $25,000
Nominal rate (APR): 4.25%
Term: 12 months

Daily (n = 365): $26,085.34
Monthly (n = 12): $26,083.44
Quarterly (n = 4): $26,079.55
Annually (n = 1): $26,062.50

Daily beats annual by $22.84 on a $25,000 deposit — about 0.09% of the balance. Daily beats monthly by $1.89. A bank offering 4.35% compounded annually pays more than one offering 4.25% compounded daily, which is why the rate is the first thing to compare and the frequency is the second.

The same comparison stretched to a five-year term

Deposit: $25,000
Nominal rate (APR): 4.25%
Term: 60 months

Daily (n = 365): $30,918.77
Annually (n = 1): $30,783.67
Difference: $135.11

Five times the term produces roughly six times the compounding gap, because each year's extra interest compounds again in the years that follow. It is still only 0.44% of the closing balance — meaningful on a long term, rarely decisive.

계산 방법

정확성과 가정

모든 계산기는 어떤 가정 위에서 움직입니다. 이 숫자가 무엇을 반영하고 무엇을 반영하지 않는지 그대로 밝혀 둡니다.

The rate is fixed for the whole term and every credit is retained in the CD rather than paid out.
Daily compounding uses a 365-day year, the convention used by most US banks. A handful use 360, which lowers the result very slightly.
Interest is credited on a regular schedule with no partial first period. Real CDs open mid-month and the first credit is prorated.
Figures are gross of tax. CD interest is taxable in the year it is credited, even if you cannot withdraw it until maturity.

계산 관행은 미국 금융기관이 예금 계좌의 APY를 공시하는 방식을 규정한 Regulation DD(12 CFR 1030)를 따릅니다. 예금자보호 대상 기관의 예금은 예금자별, 은행별, 소유 형태별로 $250,000까지 FDIC의 보호를 받습니다.

1차 자료

이 규칙은 어디에서 왔나

이 계산기가 따르는 관행은 저희가 아니라 규제 기관이 정합니다. 각 항목은 해당 기관으로 연결되므로 저희 말을 믿는 대신 직접 확인하실 수 있습니다.

세부 사항

핵심 내용과 규칙

CD에 가입하거나 재예치하기 전에 알아 둘 만한 사실을 한눈에 정리했습니다.

Compounding frequency and interest payout frequency are different settings. A CD can compound daily but pay out monthly, in which case the paid interest leaves the account and stops compounding — that is a simple-interest CD in practice, and its maturity value is lower.
If the bank quotes an APY, the compounding is already baked in. Regulation DD requires the APY to reflect the institution's own compounding method, which is exactly why the APY exists: it makes two differently-compounded CDs directly comparable.
Continuous compounding, A = Pe^(rt), is the mathematical ceiling. At 4.25% for one year it returns $26,085.40 — six cents above daily on $25,000. There is nothing left for a bank to win by compounding more often than daily.
The compounding gap scales with the balance, not with the rate. On $250,000 rather than $25,000, the five-year daily-versus-annual difference becomes $1,351.05 — the same 0.44%, but now large enough to be worth asking about.
Some credit unions compound quarterly and describe the payout as a dividend rather than interest. The arithmetic is identical; only the terminology and the insuring agency (NCUA instead of FDIC) change.

서로의 관계

이 계산기가 필요한 분

Savers comparing two near-identical offers
When two banks are 0.05% apart, the compounding schedule is the tiebreaker people reach for. Run both here first — the frequency usually moves the answer less than the rate gap does, which settles it quickly.
Anyone handed a nominal rate
Brokered CDs and credit-union share certificates are often quoted as a nominal rate with a stated compounding schedule rather than an APY. This page converts that pair into the maturity value the quote actually implies.
Long-term and retirement savers
On a five- or ten-year CD the compounding effect stops being rounding. If the deposit is large and the term long, the frequency is worth confirming in writing before you sign.

모든 CD 계산기

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