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About

Not all savings accounts are created equal. While standard tools assume monthly compounding and tax-free growth, the reality of financial planning is often more complex. Certificates of Deposit (CDs) might compound daily, while bonds might pay out semi-annually. Furthermore, ignoring the impact of capital gains tax or income tax on your interest can lead to a gross overestimation of your actual 'take-home' profit.

This General Savings & Deposit Calculator is built to handle the variables that others ignore. It allows you to adjust the compounding frequency—from daily to annually—and factor in your specific tax bracket. This level of detail is essential for comparing disparate financial products, such as a high-rate CD with daily compounding versus a lower-rate bond with favorable tax treatment.

savings calculator certificate of deposit tax on interest bank deposit compounding frequency

Formulas

The calculator determines the Future Value (FV) adjusted for the tax rate on earned interest.

FV = P × (1 + rn)nt
Interest = FV P
NetProfit = Interest × (1 tax)

Reference Data

Compounding FrequencyNominal Rate (%)Effective Annual Rate (EAR) %Growth on $10k (1 Yr)
Annually5.00%5.000%$10,500.00
Semi-Annually5.00%5.062%$10,506.25
Quarterly5.00%5.094%$10,509.45
Monthly5.00%5.116%$10,511.62
Weekly5.00%5.124%$10,512.46
Daily (365)5.00%5.127%$10,512.67
Continuously5.00%5.127%$10,512.71
LessonMore frequent compounding yields higher returns for the same nominal rate.

Frequently Asked Questions

The Nominal Rate is the advertised interest rate before compounding. The APY (Annual Percentage Yield) or EAR (Effective Annual Rate) includes the effect of compounding. This tool calculates the final outcome based on the nominal rate and frequency you select.
In many jurisdictions, interest earned on savings is treated as taxable income. If your tax rate is 20%, you only keep 80% of the interest generated. This calculator deducts that portion to show you the 'Net' profit.
For small amounts or short terms, the difference is negligible. However, on large balances (e.g., $100,000) over long periods, daily compounding can earn significantly more than annual compounding due to the faster accumulation of interest-on-interest.
Yes. Set the 'Initial Deposit' to your CD amount, the 'Term' to the CD duration, and ensure you select the correct compounding frequency (often Daily or Monthly for banks).