How to Compare Two CD Offers Fairly
Comparing CDs with the same term is easy — higher APY wins, full stop. The tricky (and common) case is different terms: a 12-month CD at 4.60% versus an 18-month at 4.35%. The longer CD produces more total interest simply because it runs longer, which fools a lot of savers. The fair comparison is per-year earnings — which is exactly what APY measures, and what this calculator puts side by side.
The Rule, and Its One Exception
The rule: the higher APY earns more per year, regardless of term. The exception is about the future, not the math — if rates are expected to fall, a slightly lower APY locked for longer can beat a higher APY that matures into a weaker market. In our 12-vs-18-month example, choosing CD B is really a bet that 6 months from CD A's maturity, new CDs will pay meaningfully less than 4.35%. If you'd rather not bet at all, split the deposit — or build a CD ladder and stop guessing entirely.
Beyond the Rate: Three Tiebreakers
- Early withdrawal penalty — between two similar offers, the milder penalty wins. Check both with our penalty calculator.
- Minimum deposit and jumbo tiers — some banks pay more above $25k or $100k; make sure you're comparing the rate at your deposit. See the jumbo CD calculator.
- Renewal behavior — a great promotional rate at a bank with poor standard rates is fine, as long as you diarize the maturity date and leave at the grace period.
Comparing a CD Against Non-CDs
Same deposit, different products? Use our dedicated tools: CD vs high-yield savings for liquid-money comparisons, and the Treasury bill calculator for the state-tax-free alternative.