CD Calculator

Glossary of Terms

• FDIC

  For more information on the Federal Deposit Insurance Corporation, please visit fdic.gov. 

• Annual Percentage Yield
  Annual percentage yield (APY) is the interest you earn on a certificate of deposit (CD) or other bank deposit. The APY calculation assumes you hold the investment to maturity and that you leave the interest in the account. The APY is greater than the stated rate on the deposit if interest is compounded more frequently than annually. If compounding is annually, the APY and interest rate are the same. For example, a bank may be selling a one-year CD at a stated rate of 1%. If the CD compounds annually, the APY is also 1%. If interest is compounded quarterly, the APY rises to 1.004%. Daily compounding raises the APY to 1.005%.
• Average Monthly Interest
  If interest is left in the account to compound, you do not actually receive this interest until the CD matures. Over the term of the CD, interest is compounded to earn additional interest. The compounded interest has the benefit of increasing average monthly interest. If interest is withdrawn – or paid out under the terms of the CD – then the interest isn’t compounded and doesn’t earn additional interest.
• CD Amount

  CD amount is the amount you deposit to buy a certificate of deposit (CD). You deposit the face value of a CD and are repaid the face value at maturity. During the CD term, you earn interest at a fixed or variable interest rate. Requires a minimum opening balance of $10,000 ($1,000,000 maximum).

• Certificate of Deposit (CD)
  A time deposit that you make at a bank generally ranging in amount from $500 to $250,000 but with a $10,000 minimum at First Republic Bank.
• Compounding Frequency
  The frequency that a bank compounds interest on your deposit (e.g. daily, monthly, quarterly).
• Deposit Term
  CD deposit term is the period for which you deposit money in a certificate of deposit (CD). Most common deposit terms are three, six and 12 months.
• Early Withdrawal
  If you wish to redeem your CD before its maturity date, the financial institution that holds it will likely charge an early withdrawal penalty.
• Interest Rate

  Enter the annual interest rate of your certificate of deposit (CD). This rate is called the simple interest rate. If interest is compounded more frequently than annually, you will earn an annual percentage yield (APY) that is greater than the stated rate.

• Value at Maturity
  CD value at maturity is equal to the sum of the face value of the CD (repaid at maturity) plus any accrued interest earned.