1. What is a 5.75% High Yield CD?

A High Yield Certificate of Deposit (CD) at 5.75% APY is a savings product that offers a fixed interest rate higher than traditional savings accounts. Your money grows at 5.75% annual percentage yield with daily compounding interest.

2. How Does CD Compounding Work?

The calculator uses the compound interest formula:

Where:

• \( A \) — Final amount
• \( P \) — Principal investment
• \( 0.0575 \) — 5.75% annual interest rate
• \( 365 \) — Days in year for daily compounding
• \( t \) — Term length in years

Explanation: Interest is calculated daily and added to your balance, causing exponential growth over time.

3. Benefits of High Yield CDs

Details: These CDs offer guaranteed returns, FDIC insurance (up to $250,000), and higher rates than regular savings accounts, making them ideal for risk-averse investors.

4. Using the Calculator

Tips: Enter your initial deposit amount and the term length in years. The calculator will show your final balance 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 when you open the account.

Q2: Are there penalties for early withdrawal?
A: Most CDs charge a penalty (typically several months' interest) for withdrawing before maturity.

Q3: How is this different from a savings account?
A: CDs offer higher rates in exchange for locking up your money for a fixed term, while savings accounts allow withdrawals anytime.

Q4: What happens when the CD matures?
A: You'll typically have a grace period to withdraw or reinvest the funds, often at current rates.

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