Use A Certificate Of Deposit Calculator To Earn The Highest Rates Of Return

Not all certificates of deposit are created equal. Now that investors can use the internet to find the best deal and the highest rates of return on these and other investments, it is more important than ever to compare different rates. This ensures that you have the right investment to meet your financial goal and one that will earn you the highest rate of return for the amount of risk that you are willing to accept. The easiest way to compare the plethora of certificates that are offered by banks and investment firms is by using a calculator.

What Is A Certificate of Deposit Calculator?

It is an investment that offers a fixed interest rate and a set maturity rate. If the investor tries to cash in his or her CD before its maturity date, then there are early withdrawal fees and penalties. Also simply known as a CD calculator, is used to find out how much interest can be earned on a specific certificate of deposit. The investor simply has to enter a few pieces of information, and the calculator will analyze the annual percentage yield (APY) and the ending balance you can expect to receive from the investment. To use calculator, the investor will need to input data such as how much his or her initial deposit will be, the total number of months that will be invested, the published interest rate of the CD, and how often the interest will be compounded.

Why You Should Use A Certificate of Deposit Calculator

The calculator will show you the annual percentage yield which measures your actual interest earned per year and the amount of compounding interest. The annual percentage yield is a great way to compare different CDs with each other. The purpose of the certificate of deposit calculator is to show the investor how much interest a particular CD will earn. In order to earn the highest interest rate possible, an investor will need to compare maturity dates, interest rates, withdraw fees and penalties, the amount invested, and other attributes. A calculator is a great tool to use to compare these factors in determining the differences between each type of certificate of deposit and other investments with one another.

Hank Coleman is the founder of several financial blogs, focusing on topics such as how to find the best certificate of deposit rates and other profitable investing opportunities. He is an entrepreneur and professional in the government sector. Hank holds a Bachelor's degree in Business Administration, a Master's in Finance, and is currently studying for his Certified Financial Planning (CFP) credentials. Always looking for a trusted financial institution for advice and tips he tends to look up information at http://www.discoverbank.com more often than not.

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