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Early Withdrawal Penalty Calculator

Breaking a CD early costs a fixed number of months of interest. See what you would walk away with — and whether waiting still wins.

Tajammal Maqbool
Formula published below · rates as of August 7, 2026 · how we test it
$
%
9 monthsmax 24
Typically: 3 months below a year, 6 months for 1–3 years, 12 months for 4–5 years.
Good to know
Ask the bank for the exact penalty clause before committing — it lives in the account disclosure, not the ad.
Where the penalty exceeds the interest earned, the difference comes out of your deposit.
Penalties are deductible above the line, and the 1099-INT reports them separately.
You'd walk away with
$103.37
net interest after the penalty — you keep a positive return
Interest earned
$313.37
Penalty (6 mo.)
−$210.00
Cash back in hand
$10,103.37
If you wait to maturity
$857.64
NEXT STEP · YOUR FIGURES CARRY OVERSee if moving the money wins
Waiting out the remaining 15 months earns $754.27 more. Break early only where a new rate or an urgent need beats that.
Compare today’s top CD rates →

How banks really charge the penalty

Nearly every consumer CD penalty is quoted in months of interest rather than as a percentage: usually 3 months on terms under a year, 6 months on one-to-three-year terms, and 12 months on longer certificates. What matters most is that the clock ignores how long you have held the CD. Break a five-year certificate in month two and twelve months of interest is owed — of which you have earned two. Those missing ten months come out of your principal, which is how people genuinely end up getting back less than they deposited.

The penalty is worked out on the nominal rate in your disclosure, whereas we estimate from APY, which runs slightly high. Treat the number above as the pessimistic bound and your bank’s disclosure as the final word.

The break-even logic in a single paragraph

Breaking a CD pays off when the gain outweighs the penalty. Concretely: you hold $10,000 at 3.00% with 18 months left, and new 18-month CDs pay 4.50%. Moving earns roughly $225 more across those 18 months, while a six-month penalty on the old CD costs about $150. Move. Swap the rates around and the same math says stay. The calculator’s “if you wait to maturity” line is precisely this comparison, run on your numbers.

Frequently asked

Yes. Where you have not earned enough interest to cover the penalty, most banks take the remainder from principal — so you get back less than you deposited. The full rules set out how each term is charged.
Sources & further reading
FDIC — deposit insurance coverage limits: $250,000 per depositor, per insured bank, per ownership category.
NCUA — share insurance for credit union accounts, on the same $250,000 basis.
Regulation DD (Truth in Savings, 12 CFR 1030) — how annual percentage yield must be calculated and disclosed.
IRS Publication 550 — interest income is taxable in the year it is credited, reported on Form 1099-INT.
FDIC National Rates and Rate Caps, July 2026 monthly survey — the national-average CD yields used as benchmarks beside results.
Top-APY figures: institutions' published rate pages and dated August 2026 roundups (Bankrate, CNBC Select, Fortune/Curinos, The College Investor), checked August 7, 2026.

Keep going

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CD Ladder Builder →
Stagger the maturities so cash frees up each year.
GUIDE
Early withdrawal penalties explained →
Usual penalty schedules, the bite into principal, and when breaking a CD is still the right call.
You'd walk away with
$103.37