How CD Early Withdrawal Penalties Work
A Certificate of Deposit (CD) locks your money in for a fixed term in exchange for a guaranteed rate — but if you need the cash before maturity, most banks charge an early withdrawal penalty. That penalty is typically expressed as a number of days of interest: shorter-term CDs might charge 90 days of interest, while CDs of three years or longer can charge a full year's worth.
This calculator estimates the interest you've earned so far based on how long you've held the CD, then subtracts the penalty to show your net payout. If you withdraw very early, the penalty can exceed the interest earned, meaning the bank deducts the difference from your original principal — so it's worth checking this before breaking a CD.
Frequently Asked Questions
Most banks charge a penalty equal to a set number of days' or months' worth of interest, based on the CD's original term. Longer terms typically carry bigger penalties.
Yes, if you withdraw very early and the interest earned so far is less than the penalty amount, some banks will deduct the difference from your original deposit.
No-penalty CDs exist but usually pay a lower rate. Otherwise, waiting until maturity or choosing a shorter term upfront are the main ways to avoid early withdrawal penalties.