APY Already Includes Compounding
The calculator uses the APY you enter as the effective annual yield. It therefore does not separately reinterpret that APY as a nominal rate with another compounding frequency.
Actual CD results can differ because of early-withdrawal penalties, promotional terms, interest-crediting rules, taxes and institution-specific conventions.
A CD is straightforward when you know the deposit, stated rate, compounding convention and term, but early-withdrawal rules can matter just as much as the headline yield. Two CDs with similar APYs may have very different penalties or renewal terms. Use the maturity calculation to compare what happens if you hold to the stated end date, then check the bank's disclosure if there is any chance you will need the money early.
Frequently Asked Questions
Do I need to enter a compounding frequency when I already have APY?
No. APY is already an effective annual yield that incorporates the institution's compounding convention.
Should I compare CDs by rate or APY?
APY is usually more useful for comparing deposit growth because it reflects compounding over a year, provided the products are otherwise comparable and you also consider term and withdrawal rules.
Methodology & Related Tools
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