Compound Interest Quarterly Calculator

A = P(1 + r/4)^(4t), where P is the deposit, r the annual rate (APR) as a decimal and t the years. For regular deposits at the end of each quarter, add PMT x [((1 + r/4)^(4t) - 1) / (r/4)]. The effective annual yield (APY) is (1 + r/4)^4 - 1. At 5% for 3 years, $10,000 grows to $10,000 x (1.0125)^12 = $11,607.55.

APY = (1 + r/4)^4 - 1, where r is the APR as a decimal. At 4.5% APR: (1.01125)^4 - 1 = 0.045765, a 4.577% APY. The calculator shows the APY next to the result. To convert back, APR = 4 x ((1 + APY)^(1/4) - 1).

Some do. Compounding varies by bank and product: some CDs compound daily or monthly, and some short CDs pay simple interest at maturity. The account disclosure states the method. The APY a bank must disclose already reflects whatever schedule applies, so comparing CDs by APY gives the right answer regardless of frequency.

At 4.5% APR (4.577% APY) compounded quarterly: $457.65 after 1 year, $936.25 after 2, $1,436.74 after 3 and $2,507.51 after 5. Enter your CD's actual rate and term for a precise figure. All figures are before tax.

Monthly compounding credits interest 12 times a year, quarterly 4. At 5% APR the APYs are 5.116% and 5.095% — 0.021 points apart. On $10,000, monthly earns $2.17 more than quarterly in one year and $13.22 more over five. Real but minor; the APY offered matters far more.

Yes — more frequent compounding always gives a higher effective yield from the same nominal rate. At 5% APR, annual compounding yields exactly 5.000% and quarterly 5.095%. On $10,000, quarterly earns $9.45 more than annual in one year and about $147 more over ten. The advantage over annual is about 4.4 times the advantage of monthly over quarterly.

Continuous compounding is the theoretical maximum: at 5% APR its APY is e^0.05 - 1 = 5.127%, against 5.095% for quarterly. On $10,000 over one year, continuous compounding earns $3.26 more than quarterly. No savings product compounds continuously; daily compounding is the closest real-world case and is $3.22 ahead of quarterly.

Yes. Most CDs charge an early-withdrawal penalty — commonly a number of months' interest set by the term — if you redeem before maturity. It reduces the interest earned and can reach into principal if the penalty is larger than the interest so far. This calculator assumes the CD is held to maturity; your account agreement gives the exact penalty.

Generally yes. Interest credited to a CD is taxable in the year it is credited, even if you cannot withdraw it without penalty. The bank reports it on Form 1099-INT (or, for some CDs longer than one year, as original issue discount on Form 1099-OID), so a 5-year CD produces a tax bill each year. A CD inside an IRA is the main exception. See IRS Publication 550.

You keep the rate but lose the interest-on-interest. On a $10,000 CD at 4% for 5 years, quarterly compounding grows the balance to $10,000 x (1.01)^20 = $12,201.90. Taking each $100 quarterly payment instead leaves $10,000 plus $2,000 of payouts — $12,000, about $202 less. Payouts make sense if you need the income.

No — the APY is an annual figure, so a 6-month CD earns roughly half of it. A 6-month CD at 5.00% APY returns (1.05)^0.5 - 1 = 2.47% over its term, about $247 on $10,000. Banks quote APY on an annual basis so terms of different lengths can be compared; scale it by the fraction of a year the CD runs.

About $6,269. The quarterly rate is 1.125% and there are 20 quarters, so the balance is $25,000 x (1.01125)^20 = $31,268.76, an APY of 4.577%. A simple-interest CD at the same rate would pay 4.5% x 5 x $25,000 = $5,625, so quarterly compounding adds about $644 over the term, before tax and any early-withdrawal penalty.