Find out how much interest you can earn over time in certificates of deposit with this CD calculator from Investormint.
Find out how much interest you can earn over time in certificates of deposit using our CD calculator.
Whether you are looking for a 5 year CD calculator or a 6 month CD calculator, you can discover how much interest can be earned.
When it comes to investing your cash savings, you have got lots of choices:
Stocks and bonds may be familiar but what are certificates of deposit?
A certificate of deposit is a savings certificate with a fixed interest rate and fixed maturity date.
CDs may pay higher rates than standard Savings accounts but your cash is usually tied up.
The risk is perceived to be low when you deposit funds into CDs, which are generally fee-free at most banks and credit unions.
Most CDs issued by commercial banks are FDIC insured up to $250,000 per person. And if you purchase a Share Certificate from a credit union, you will be insured up to the same level by the National Credit Union Administration (NCUA).
The big difference between a savings account and a CD is your money is locked up when you deposit funds into a CD.
If you decide to withdraw funds prior to the maturity date, you will usually be charged a steep penalty.
But CDs have flexible term lengths that vary from a few months to many years. So, if you know that you won’t need to dip into your funds anytime soon, a longer time span may be appropriate.
| “When you deposit money into a CD, it is locked up for a fixed time. The longer the term length, the higher the interest earned usually” |
On the other hand, if you expect that you will need money to pay for an upcoming purchase, like a car, boat, home, or even a wedding, then a Savings account may be a better choice.
You can often earn as much as 50% more interest from CDs compared to high yield Savings accounts over the same time period.
Mr. Market is fickle and emotional... After ten years of going up in a nearly unbroken line, he abruptly decided to reverse course...
And usher in a bear market that has crushed portfolios — But while most investors were going through the worst year since the Global Financial Crisis...
A small group of 3,700 people had the chance to collect instant "bonus payouts" courtesy of Mr. Market every week.
All thanks to a method most investors have no idea about… watch this demo showing how it works.
When you withdraw your money from a CD before the fixed maturity date, you will be charged an early withdrawal penalty.
Usually, the penalty amounts to a portion of the interest but it typically won’t affect your principal invested.
The amount usually varies depending on the term length of the CD and the terms stipulated by your bank or credit union.
Keep in mind that insurance coverage by the Federal Deposit Insurance Corporation and National Credit Union Administration will not cover penalty fees, so make sure you have enough cash set aside to cover emergencies before locking it up in a CD.
➤ Free Guide: 5 Ways To Automate Your Retirement
If the idea of tying up your money in a long term CD doesn’t whet your appetite, a CD ladder might be a good fit.
The way a CD ladder works is you invest your money across different term lengths.
Let’s say you had $5,000 available to invest in CDs. Rather than choose between a 6-month CD and a 10-year CD, you could spread your money proportionately across a variety of CDs with different term lengths.
For example, you could place $1,000 in a 1-year CD, and a similar amount in a 2-year CD, 3-year CD, 4-year CD, and 5-year CD.
When the shortest term CD matures, you can invest it into a new 5-year CD.
As each CD matures, you repeat the process so that eventually a 5-year CD will mature each year, meaning you’re always getting the benefit of maximum interest on all your money while maintaining liquidity on a portion of your invested capital.
CDs come in a variety of shapes and sizes, so to speak.
The “plain vanilla” CD where you deposit your money for a fixed term length and cash in subsequently on the interest earned is just one of the many types of CDs.
Others types of CDs include the IRA CD, Step-up CD, Bump-up CD, Jumbo CD, and Liquid CD.
| IRA CD | An IRA certificate of deposit is regular CD held in an IRA retirement account that enjoys tax advantages. |
| Step-up CD | In a step-up certificate of deposit, interest rates step-up or increase at regular and predictable intervals. |
| Bump-up CD | When banks increase CD rates, you can request a bump-up to the new interest rate. Generally, you will be restricted to no more than a couple of requests during the term length. |
| Jumbo CD | Jumbo certificates of deposit usually pay higher interest rates but require high minimum balances of often six figures or more. |
| Liquid CD | Liquid certificates of deposit allow you to access your money but usually impose higher minimum balance requirements and pay lower interest rates. |
Mr. Market is fickle and emotional... After ten years of going up in a nearly unbroken line, he abruptly decided to reverse course...
And usher in a bear market that has crushed portfolios — But while most investors were going through the worst year since the Global Financial Crisis...
A small group of 3,700 people had the chance to collect instant "bonus payouts" courtesy of Mr. Market every week.
All thanks to a method most investors have no idea about… watch this demo showing how it works.
A certificate of deposit may be right for you if you can check all the boxes on the questions below.
| Do you have emergency funds set aside that you can access? | ✅ |
| Can you afford to tie up savings for anywhere from a few months to a few years? | ✅ |
| Do you prefer a fixed rate of return versus a variable return on your investments? | ✅ |
| Would you like your money to be guaranteed by the government? | ✅ |
Have you invested in certificates of deposit? Did our bank CD calculator answer your questions on how much interest you can earn? Share your investing tips in the comments below, we would love to hear from you.
>> Check Out Chime Bank – The Online Bank
>> View CD Rates At Delta Community Credit Union
>> State Employees Credit Union Review
Do you know how to read the candlesticks on your chart? If not don't worry. Chris Pulver created an ebook, Candlestick Cheat Sheet, that can teach you, in layman terms, the 10 most powerful candlestick patterns. It's a great start for those that are new to Forex and may want to trade on the conservative side when starting out.
Click here to download your copy now
SoFi Personal Loans Review: Borrowers with excellent credit histories can get fixed or variable rate…
Personal Capital pairs clients who enroll in its robo-advisory service with dedicated financial advisors. This…
A Historic Night at Super Bowl LIX On the grand stage of Super Bowl LIX,…
YieldStreet Review: YieldStreet was ranked among the most rapidly expanding financial services firm in the…
Brad Pitt has evolved from a handsome leading man of Hollywood blockbusters into a multifaceted…
2 Chainz Net Worth: 2 Chainz net worth is estimated at around $9 million.Read more…
This website uses cookies.