1. What is a 5.75% High Yield CD?

A 5.75% High Yield Certificate of Deposit (CD) is a savings product that offers a fixed annual percentage yield (APY) of 5.75% for the term of the CD. Your money grows faster than regular savings accounts due to the higher interest rate and compounding effect.

2. How Monthly Compounding Works

The calculator uses the compound interest formula:

Where:

• \( A \) — Final amount
• \( P \) — Principal investment
• \( r \) — Annual interest rate (5.75% = 0.0575)
• \( n \) — Number of compounding periods per year (12 for monthly)
• \( t \) — Time in years

Explanation: Interest is calculated each month and added to the principal, so each subsequent month's interest calculation includes previously earned interest.

3. Benefits of This CD

Details: At 5.75% APY with monthly compounding, this CD offers higher returns than most savings accounts while being FDIC-insured up to $250,000. The fixed rate protects against future rate drops.

4. Using the Calculator

Tips: Enter your initial deposit amount and the term length in years (can use decimals for partial years). The calculator shows both the final amount and total interest earned.

5. Frequently Asked Questions (FAQ)

Q1: Is the 5.75% rate guaranteed?
A: Yes, CD rates are fixed for the entire term once you open the account.

Q2: What's the minimum deposit?
A: Minimums vary by bank but typically range from $500 to $2,500 for high-yield CDs.

Q3: Are there penalties for early withdrawal?
A: Yes, most CDs charge a penalty (typically 3-12 months of interest) for withdrawing before maturity.

Q4: How does this compare to daily compounding?
A: Monthly compounding at 5.75% APY is equivalent to about 5.72% APR compounded daily - the difference is minimal.

Q5: When is interest paid out?
A: Interest is credited monthly but generally can't be withdrawn without penalty until maturity.