CD Tax Calculator
CD interest is ordinary income in the year it is credited — even when you never touch it. See the bill, and the yield you actually keep.
The timing trap on multi-year CDs
CD interest counts as ordinary income in the year it is credited, not the year you withdraw it. A $50,000 five-year CD at 4.05% credits roughly $2,000 of taxable interest in year one — money you cannot touch without a penalty, yet on which a 24%-bracket saver owes about $486 by the following April. Plan for that cash from elsewhere, or hold long CDs inside an IRA where the annual bill disappears.
Your bank reports every dollar on a 1099-INT once you pass $10 a year, and the IRS gets the same copy. There is no version of this in which the interest quietly slips by unnoticed.
After-tax yield is the only yield
A 4.40% CD in a combined 29% bracket pays 3.12% after tax. That figure — not 4.40% — is what should go up against a municipal fund, a Treasury, or the choice to pay down a 6% loan instead (spoiler: the loan wins). The calculator prints your after-tax APY precisely so you can carry one honest number into every other comparison.