CD Calculator (Certificate of Deposit)
A Certificate of Deposit (CD) is a time-bound savings product with a fixed interest rate. You deposit a lump sum, commit to a fixed term, and receive the principal plus interest at maturity. CDs typically offer higher rates than regular savings accounts because you agree not to withdraw early.
This calculator computes the CD maturity value with monthly compounding: A = P × (1 + r/n)^(n×t), where n = 12 (monthly compounding). The APY (Annual Percentage Yield) is also calculated so you can compare with other products.
Under an illustrative assumption: depositing 200.000.000 VND at 6%/year for 3 years — at maturity you receive 239.336.105 VND, of which 39.336.105 VND is interest. APY = 6.17% (higher than the nominal 6% due to monthly compounding).
The CD formula
Maturity value
A = P × (1 + r/n)^(n×t)
| Symbol | Meaning |
|---|---|
| P | Deposit (200.000.000 VND) |
| r | Annual rate (6% = 0.06) |
| n | Compounds per year (12 — monthly) |
| t | Term (3 years) |
| A | Maturity value (239.336.105 VND) |
APY — Annual Percentage Yield
APY = (1 + r/n)^n − 1 = 6.17%
APY exceeds the nominal rate because it reflects the compounding effect. More frequent compounding → higher APY.
Comparison: simple vs compound
Simple interest: A = P × (1 + r×t) = 236.000.000 VND Compound (CD): A = 239.336.105 VND Difference: 3.336.105 VND — the extra return from compounding.
Shorter term: 1 year
1-year CD: maturity 212.335.562 VND, interest 12.335.562 VND. The longer the term, the more compounding amplifies returns.
Model limitations
The tool assumes a constant rate throughout the term, monthly compounding, and no early withdrawal. In practice: early withdrawal usually incurs a penalty (loss of interest or a fee), and rates may change at renewal.
Worked example: Deposit 200.000.000, 6%/year, 3 years
| Metric | Value |
|---|---|
| Deposit | 200.000.000 VND |
| Nominal rate | 6%/year |
| Term | 3 years |
| Compounding | Monthly (12×/year) |
| APY | 6.17% |
| Maturity value | 239.336.105 VND |
| Total interest | 39.336.105 VND |
| Compound vs simple gain | 3.336.105 VND |
Scenario comparison
| Scenario | Maturity | Interest |
|---|---|---|
| 6%/year, 1 year | 212.335.562 | 12.335.562 |
| 6%/year, 3 years | 239.336.105 | 39.336.105 |
| 8%/year, 3 years | 254.047.410 | 54.047.410 |
Frequently asked questions
What is a Certificate of Deposit (CD)?
A CD is a time-bound savings product with a fixed interest rate. You deposit 200.000.000 VND for 3 years at 6%/year and receive 239.336.105 VND at maturity. Early withdrawal typically incurs a penalty (loss of interest or a fee).
How is APY different from the nominal rate?
The nominal rate of 6% is the advertised rate. APY = 6.17% reflects the effect of monthly compounding — you actually earn more than 6% because interest is reinvested each month. APY is the more accurate measure when comparing products.
Is a longer term always better?
Usually: a 1-year CD earns 12.335.562 VND in interest; a 3-year CD earns 39.336.105 VND. But a longer term also means your money is locked up longer and rates may change at renewal. Consider your liquidity needs.
What happens if I withdraw early?
Most CDs penalise early withdrawal: you may lose all accrued interest or pay a fee (1-3% of the withdrawn amount). If you need liquidity, choose a shorter term or split your money across multiple CDs with different terms (a CD ladder strategy).
Are CDs safe?
CDs from banks are typically deposit-insured (in Vietnam: by the Deposit Insurance of Vietnam — DIV). CDs are one of the safest investment products, but their rates are usually lower than stocks, bonds, or mutual funds.
Should I choose a CD or regular savings?
CDs usually offer 1-3% higher rates than demand savings but lock your money for a fixed term. If you are confident you won't need the money for 3 years, a CD is better. If you need flexibility, regular savings are more suitable despite the lower rate.