How to Find Out How Much Certificate of Deposits Are Worth

by Samantha Kemp
Banks may be able to provide you with missing information about your CD.

When you buy a certificate of deposit, you're committing to deposit a specified amount of money for a specified period of time so that you can earn interest on your deposit. Most CDs have an investment period between three months and 10 years, and banks may charge a penalty if you take the money out before the deposit fully matures. When the certificate of deposit matures, you'll receive the money that you originally invested, as well as any accrued interest. Determining the value of your CD requires a few calculations.

Read the disclosure statements for your certificate of deposit that the bank gave you when you acquired the CD. Pay particular attention to fine print regarding the terms of the certificate of deposit, including the interest rate, amount of months for the certificate of deposit and amount of the deposit. Contact the bank where the certificate of deposit was made if you do not have this information.

Plug in the terms into an online calculator. HCU and First State Bank offer such calculators in which you enter the amount of the deposit, interest rate and number of months that the cd has had to mature. These calculators also offer a selection for how often interest compounds, which occurs when the interest is added to the principal.

Use the following formula if you do not have access to a computer or if the terms don't fit within the calculator's framework: A = P(1 + r/n) ^ nt. In this equation, r is equal to the annual interest rate and is expressed as a decimal. P is the amount you deposited, n is the number of times the interest is compounded in a year and t is the number of years before the account matures. A represents the final value of the certificate of deposit, including all interest that accrues during the time period.

Check the fine print for any early withdrawal penalties. The Security Exchange Commission explains that if you're the sole owner of a brokered CD, you might be able to pay a penalty to the bank and get your money bank. However, if you're a co-owner with other customers, your broker will have to find a buyer for your portion, and you may suffer a loss of your original deposit if the CD has to sell it at a discount.

About the Author

Samantha Kemp is a lawyer for a general practice firm. She has been writing professionally since 2009. Her articles focus on legal issues, personal finance, business and education. Kemp acquired her JD from the University of Arkansas School of Law. She also has degrees in economics and business and teaching.

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