Figuring out how much interest you will receive when investing in a Certificate of Deposit (CD) is easy with a CD Rate Calculator. You enter the CD Rate term, initial deposit, interest rate and the CD calculator automatically calculates the return.
Some calculators also allow you to enter criteria like how interest is compounded, which usually is daily or monthly. After the CD criteria is entered and calculated, the ending balance including interest earned is shown along with the Annual Percentage Yield (APY).
The Annual Percentage Yield is the effective annual interest rate earned on a CD. The CD’s APY depends on the frequency of compounding and the interest rate. The best way to compare the rate of return on a CD is using the APY since that is the actual interest you will earn on your investment. Use the APY to compare certificates of deposit from several different banks.
There are tons of CD Calculators out there to figure out the best CD Rate, MonitorBankRates.com offers a free CD calculator CD Calculator and CD Ladder Calculator you can use to figure out how much interest you will earn.
Author: Brian McKay
August 9th, 2008
