Does the penalty ever hit principal?

If accrued interest is less than the penalty, some banks dip into principal. This estimate assumes enough interest; check your bank’s rules.

We use APR as a simple rate for estimation. APY may differ slightly due to compounding.

No. Any taxed interest is separate from this estimate.

What if the bank’s penalty is tiered?

Use the penalty months that match your CD’s term. Adjust the input to reflect your actual penalty.

Can I reinvest at a higher rate after breaking?

Yes—compare the lost interest to potential gains at the new rate to decide.

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CD Early Withdrawal Penalty Calculator

Estimate your net payout if you break a CD early, factoring accrued interest, the penalty, and interest you’d forfeit vs holding to maturity.

Results

Interest accrued so far: $225
Penalty (interest forfeited): $113
Net payout if withdrawn now: $10,113
Interest if held to maturity: $450
Interest lost vs holding: $338

How to use this calculator

Enter CD principal, APR, term, and months elapsed.
Enter the penalty in months of interest (3–6 months typical).
Review accrued interest, penalty amount, net payout today, and interest you’d forfeit versus waiting.

Inputs explained

APR/APY: Use your CD’s stated APY/APR; calculator treats it as simple for estimation.
Penalty months: Early withdrawal penalties are often stated as X months of interest.
Months elapsed: How long the CD has been earning interest so far.

How it works

Accrued interest = principal × APR/12 × months elapsed.

Penalty = principal × APR/12 × penalty months (assumes penalty is expressed in months of interest).

Net payout now = principal + accrued interest − penalty.

Interest lost vs holding = maturity interest − (accrued interest − penalty).

Formula

Accrued interest = Principal × (APR/12) × Months elapsed
Penalty = Principal × (APR/12) × Penalty months
Net payout = Principal + Accrued − Penalty
Interest lost = Interest to maturity − (Accrued − Penalty)

When to use it

Deciding whether to break a CD for a higher-rate offer or urgent cash need.
Comparing net payout now vs interest left on the table if you hold.
Estimating penalty impact for multiple CDs when reshuffling savings.

Tips & cautions

Check your bank’s exact penalty rules; some reduce principal if interest earned is less than the penalty.
If rates have jumped, breaking and moving to a higher-rate CD or savings may outweigh the penalty—compare yields.
If you’re close to maturity, waiting may cost less in foregone interest than paying the penalty.
Assumes simple interest for estimation; actual APY compounding may differ slightly.
Penalty structures vary; some banks impose different penalties by term length or break principal if interest is insufficient.
Taxes on interest are not included.

Worked examples

$10k CD, 4.5% APR, 12-month term, break at 6 months, 3-month penalty

Accrued interest ≈ $225; penalty ≈ $112.50
Net payout ≈ $10,112.50
Interest lost vs holding ≈ $337.50

$25k CD, 5.2% APR, 18-month term, break at 9 months, 6-month penalty

Accrued interest ≈ $975; penalty ≈ $650
Net payout ≈ $25,325
Interest lost vs holding ≈ $1,625

Deep dive

This CD early withdrawal penalty calculator shows your penalty, net payout, and interest lost if you break a CD before maturity.

Use it to decide whether moving to a higher-rate account or keeping the CD is better after accounting for the penalty.

FAQs

Does the penalty ever hit principal?: If accrued interest is less than the penalty, some banks dip into principal. This estimate assumes enough interest; check your bank’s rules.
APY vs APR?: We use APR as a simple rate for estimation. APY may differ slightly due to compounding.
Are taxes included?: No. Any taxed interest is separate from this estimate.
What if the bank’s penalty is tiered?: Use the penalty months that match your CD’s term. Adjust the input to reflect your actual penalty.
Can I reinvest at a higher rate after breaking?: Yes—compare the lost interest to potential gains at the new rate to decide.

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Estimates only. Early withdrawal penalties and compounding vary by bank. Confirm terms with your institution before breaking a CD.