| A CD calculator or certificate of deposit calculator can | | | | To calculate the CD rate you first need to look at the |
| be used to demonstrate the amount of interest that a | | | | amount of money that has been deposited in the |
| specific CD has the ability to earn. If you visit the | | | | account. Then you need to determine what the terms |
| Internet and do a search then you will find plenty of | | | | and interest rate are. To use an example, if the term |
| these calculators. Search around to find the one that is | | | | of the certificate of deposit is six months and the |
| most relevant for you. | | | | interest rate is 2.2 percent daily compounded then the |
| In order to use this financial tool you must enter into the | | | | terms under which the CD is placed is $1,000. What |
| area provided your initial deposit amount. You also | | | | this means is that at the end of a six month term the |
| must enter the interest rate, the length of time the CD | | | | total dollar amount will equal $1,011. |
| will be for and how often the interest will be | | | | It is important to define some terms related to this |
| compounded. With the information you give it the | | | | topic. The initial deposit is the amount of funds that is |
| calculator will generate the information you require. It | | | | placed in the CD to start it. The term of a CD is the |
| will provide to you the total annual yield, the annual | | | | length of time that the money will be in the certificate |
| percentage yield as well as the ending balance you will | | | | of deposit and how long it will take to mature. The |
| be left with once the certificate of deposit matures. | | | | interest rate is the percentage of money that is paid |
| Not all CD calculators are the exact same. | | | | on the dollar amount of the certificate of deposit. |
| A CD rate calculator (or CD interest rate calculator) | | | | Compounding interest is another term you may have |
| makes it possible to discover how much interest a | | | | heard of before. This is the amount of interest that the |
| certificate of deposit has incurred or how much | | | | interest on the CD has made. |
| money it will incur in the length of time until it matures. | | | | |