5.75% High Yield CD Calculator

CD Growth Formula:

\[ A = P \times \left(1 + \frac{0.0575}{365}\right)^{365 \times t} \]

Final Amount:

Interest Earned:

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1. What is a 5.75% High Yield CD?

A High Yield Certificate of Deposit (CD) is a savings account that offers a fixed interest rate for a specified term. This calculator assumes a competitive 5.75% Annual Percentage Yield (APY) with daily compounding, meaning your interest earns interest each day.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ A = P \times \left(1 + \frac{r}{n}\right)^{n \times t} \]

Where:

$ A $ — Final amount
$ P $ — Principal investment ($)
$ r $ — Annual interest rate (5.75% or 0.0575)
$ n $ — Compounding periods per year (365 for daily)
$ t $ — Time in years

Explanation: Your money grows exponentially as interest is added to the principal daily, then earns more interest in subsequent periods.

3. Benefits of High Yield CDs

Details: High Yield CDs offer guaranteed returns with FDIC insurance up to $250,000. The 5.75% rate is significantly higher than regular savings accounts, making them ideal for conservative investors.

4. Using the Calculator

Tips: Enter your initial deposit amount and the term length in years. The calculator shows your total balance at maturity and how much interest you'll earn.

5. Frequently Asked Questions (FAQ)

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

Q2: When will I receive my interest?
A: Typically at maturity, though some CDs pay interest monthly or quarterly.

Q3: Are there penalties for early withdrawal?
A: Yes, most CDs charge several months' interest for early withdrawals.

Q4: How is this different from a savings account?
A: CDs offer higher rates in exchange for locking up your money for a fixed term.

Q5: Are CD earnings taxable?
A: Yes, interest is taxable as ordinary income in the year it's earned.