Can a CD Calculator Help You Manage Your Retirement Income?

Use a CD Calculator to See How Your Money Really Grows

September 2012

You've decided to put some of your savings into certificates of deposit (CDs). But now you're comparing CDs from various financial institutions and realizing it's not quite as simple as you thought.

Yes, you can see the annual percentage yields (APYs) on the screen, but you also need to consider how often that interest is being compounded (added back in), and the length of the CD's term. What's the best choice for your situation?

There's no need to pull your hair out: A CD calculator can help you make the right choice, letting you see what you'll earn by putting your money into a particular CD for a particular length of time.

"Using a CD calculator to figure out your return can help you save time and avoid errors, especially when it comes to figuring out compound interest," says the financial website RatesORama. Manually figuring out the long-term results of a CD ladder strategy, for example, is tough — even when you're a math whiz. Why bother, when there are far more reliable and easy-to-use methods?

Knowing what to expect from the money you use to generate more money is critical to your budgeting process in retirement. With that knowledge, you can try on different strategies before committing to those that will work for you. And while you can't always forecast your expenses, the ability to predict your interest income precisely may lead to more informed strategic financial decisions in the long run.

Online banking calculators are available on many websites, and some are easier to use than others. The Ally Bank online CD calculator lets you see exactly how your money will grow at various rates of return over various amounts of time. Simply choose the Ally Bank CD you're considering in the drop-down menu, and then click on the calculator tab. Then choose the length of term before maturity and type in the amount you plan to put into the account. The potential account balance and earnings are clearly stated.

If you want to see how you'd fare with a different bank's CD, you can type its rate into our CD calculator. You'll probably see that our APYs are generally higher. In fact, based on the rates published by, rates for our CDs are consistently among the most competitive nationwide.

Whether you choose Ally Bank or not, the experts we've talked to say you owe it to yourself to find a good online CD calculator and take a careful look at your choices. "With the plethora of places to park your money — from CDs to bank savings accounts — it pays to research a bit to find a reasonable interest rate," writes Lori Rozsa in A Savings Calculator for Every Goal on financial website

For more information about Ally Bank CDs, visit or call 877-247-ALLY (2559), where customer care representatives are available 24/7.

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