How to Calculate Interest on CD Rates

Use an online interest rate calculator to find the CD with the best return on your investment.

Calculating the interest on a Certificate of Deposit is key in finding out which CD will provide you with the highest return on your investment. There are many financial websites that have CD calculators. In this article, we'll use the CD calculator found on Bankrate.com

Instructions

1. Go to Bankrate.com.

2. Click on "Calculators" at the top of the page.

3. Select the "Certificate of Deposit" calculator under the Investment Calculators.

4. Fill in the total dollar amount of your CD in the "Initial Deposit" field.

5. Slide the "Months" bar to specify the time frame you will hold the CD.

6. Enter the "Interest Rate" the financial institution is offering, and select how the interest in compounded from the drop-down menu.

7. Click "Calculate."

Tips & Warnings

• If you like the safety of a CD but don't want to tie up your money until maturity, look into TIPS (Treasury Inflation-Protected Securities). See the links in the Resource section.

• For help choosing a CD and finding the best CD rates, see the links in the Resource section.

• Withdrawing your money before your CD matures can incur substantial penalties, so be sure you can do without the money for the term of the CD.

References

• Bankrate.com: CD Calculator