How it works
APY already includes the effect of compounding, so growth is simply the deposit times (1 + APY) raised to the number of years.
Formula
Balance = Deposit × (1 + APY)^(months ÷ 12)
Example
$10,000 at 4.25% APY for 12 months grows to $10,425.
Assumptions & limitations
- APY stays fixed for the full term.
- Interest remains in the CD until maturity.
- Before taxes.
Frequently asked questions
What happens if I withdraw early?
Most CDs charge an early withdrawal penalty, often several months of interest.