Here we have fixed rate CD calculator for you which also takes into account inflation and tax as well. You can select different kinds of compound as needed. You can choose one that you deem fit for your calculation but keep it in mind that the APRs that banks give usually have an annual schedule for compounding.
When you want to save some money, and you're making enough that you can easily put something into your savings for a given time period without having to touch them, that's when you can start thinking about CDs, or Certificates of Deposit.
Usually, CDs offer a comparatively higher interest rate when compared to savings accounts. Also, there's almost no risk involved when you put your savings into CDs. However, you have to agree on leaving your money there for a particular period of time, and you can't use your money during that period. Your money stays right there until a CD reaches its maturity date and after that you can simply withdraw it. If you opt out before the maturity date then you'll have to bear some major penalty fee. CDs can have different types when it comes to interest rates. Some of them can have variable interests, others can have changing interest, while some others can have interest rates that are linked with different kinds of indexes.
Many people ask what makes CDs a safe option to go with. Well, that's because FDIC protects them. If you're working with a bank that FDIC-insured, your funds - up to $250,000 at the time of deposit - are secured by government agency in case if your bank fails. However, if you want to put more money in CDs, you can opt for another FDIC-insured bank and continue to spread your money around so that you are always under FDIC protection.
Something great about Certificates of Deposit is the fact that they make compound interest. On completion of each interest period, there's a specific interest percentage that is added to your funds and they grow. On next day, interest is added again to new total which is, obviously, greater than what was added a day earlier. So, it all adds up quite nicely.
However, the interest amount on CDs usually differs from one bank to another, and longer term CDs tend to pay better interest rates, but that amount differs between different banks. That being the reason, it's really important that you shop around and compare different maturity periods and annual percentage yield. The value of annual percentage yield usually determines the amount of compound interest that you'll get.
The CD calculator here requires you to enter quite a few different values. You have to enter the amount that you want to deposit, the rate of interest you're getting, the type of compound interest, period for which you are depositing your money, inflation rate and the marginal tax rate. You have to be very precise with these values in order to get the most accurate results. As you hit the calculate button, the CD calculator shows you the values for total principal, end balance, total interest and the total amount of tax. Besides, there’s a table that shows you exactly how the numbers will look like through each year of your deposit term.