How much is my CD early withdrawal penalty? Estimate exactly what you lose — and what you get back — when cashing out a certificate of deposit before maturity, including your interest earned, the bank's penalty, your net payout, and the interest you give up by not holding to term.
Enter your deposit, rate, term, and how long you have held the CD. Pick the penalty structure that matches your bank's policy — 90 days, 6 months, 180 days, 3 months of interest, 1% of principal, or a custom number of days.
Scenario: Maya opened a 24-month CD with $10,000 at 5.0% compounding monthly. After 12 months an emergency comes up and she cashes out early. Her bank charges a 6-month interest penalty, the standard for terms of 12 months or more.
Balance at withdrawal: $10,000 × (1 + 0.05/12)^12 = $10,511.62 (interest earned: $511.62).
Penalty: (0.05 ÷ 12) × 6 × $10,000 = $250.00.
Net withdrawal: $10,511.62 − $250.00 = $10,261.62.
Forgone interest: maturity balance $11,049.41 minus $10,000 = $1,049.41 total interest; minus $511.62 already earned = $537.79 of interest given up.
Maya walks away with $10,261.62 — $261.62 more than she deposited, but $537.79 less interest than holding to maturity would have earned.
Scenario: Leo bought a 12-month CD for $5,000 at 4.5% compounded monthly. Six months in, he needs the money for a car repair. His bank charges 90 days of interest — typical for terms under 12 months (and equal to 3 months of interest).
Balance at withdrawal: $5,000 × (1 + 0.045/12)^6 = $5,113.56 (interest earned: $113.56).
Penalty: (0.045 ÷ 12) × 3 × $5,000 = $56.25.
Net withdrawal: $5,113.56 − $56.25 = $5,057.31.
Forgone interest: maturity balance $5,229.70 would have earned $229.70 total; minus $113.56 earned = $116.14 given up.
Because the 90-day penalty is smaller than the interest earned, Leo still comes out ahead of his original deposit — by $57.31.
Scenario: Nina put $20,000 into a 36-month CD at 4.0% compounding quarterly. Halfway through the term she withdraws. Her credit union charges a flat 1% of principal as the early withdrawal penalty.
Balance at withdrawal: $20,000 × (1 + 0.04/4)^(4 × 1.5) = $21,230.40 (interest earned: $1,230.40).
Penalty: 1% × $20,000 = $200.00.
Net withdrawal: $21,230.40 − $200.00 = $21,030.40.
Forgone interest: maturity balance $22,536.50 would have earned $2,536.50 total; minus $1,230.40 earned = $1,306.10 given up.
A percentage-based penalty is predictable and easy to compare across banks — here it costs Nina $200 flat, far less than a 6-month interest penalty on this balance would have ($400).
P = principal, r = annual rate as a decimal, n = compounding periods per year (12 monthly, 4 quarterly, 1 annually), yearsHeld = months held ÷ 12. Example: $10,000 × (1 + 0.05/12)^12 = $10,511.62 after 12 months.
The interest your CD has accrued at withdrawal, before the penalty is subtracted. In the example above: $10,511.62 − $10,000 = $511.62.
Months-based penalties (90 days, 3 months, 6 months, 180 days) use the monthly interest rate times the penalty months times principal. 90 days = 3 months and 180 days = 6 months. Custom days use months = days ÷ 30. Percentage penalties (e.g. 1% of principal) are simply that percent of your deposit. Example: (0.05 ÷ 12) × 6 × $10,000 = $250.00.
Net withdrawal is what you actually receive. Forgone interest compares the full interest your CD would have earned by maturity against what you already earned. Example: net = $10,511.62 − $250.00 = $10,261.62; forgone = ($11,049.41 − $10,000) − $511.62 = $537.79.
| CD Term | Typical Penalty | Penalty in Months of Interest |
|---|---|---|
| Under 12 months | 90 days of interest | 3 months |
| 12 – 24 months | 180 days of interest | 6 months |
| 24 – 48 months | 180 days of interest | 6 months |
| 60 months (5 years) | 365 days of interest | 12 months |
These are common policies at major banks and credit unions — your institution's exact penalty is set in your CD agreement.
A CD is a contract: you lend the bank your money for a fixed term, and the bank pays a higher rate than a savings account because it can count on that money for the whole term. When you withdraw early, the bank has to replace your funds mid-term, often at a lower reinvestment rate. The penalty compensates the bank for that disruption and discourages withdrawals that would break the term structure of the account.
Penalties are quoted in one of two ways: as a number of days or months of interest (90 days, 6 months, 180 days, 365 days), or as a percentage of the principal (typically 0.5% to 1%). Days-of-interest penalties scale with your rate and balance — the more your CD earns, the bigger the penalty. Percentage penalties are flat, so they are easier to predict but can feel arbitrary relative to your actual interest.
Days-of-interest penalties charge you the equivalent of a set number of days' or months' worth of interest on your original principal, calculated at your CD's rate: penalty = (rate ÷ 12) × months × principal. A 6-month penalty on a $10,000 CD at 5% costs $250, while the same penalty at 3% costs only $150. These penalties are the industry standard and are what this calculator models by default.
Percentage-of-principal penalties charge a flat percent of what you deposited, regardless of your rate. A 1% penalty on $10,000 is always $100, whether your CD pays 3% or 6%. Percentage penalties can be cheaper when rates are high and more expensive when rates are low — run both through this calculator before choosing where to open a CD.
One important rule at many banks: the penalty can be taken from your principal if you haven't earned enough interest to cover it. If your penalty exceeds your interest earned, you get back less than you deposited — this calculator warns you when that happens.
Choose 90-day, 6-month, 180-day, 3-month, 1%-of-principal, or custom-day penalties to match your bank's policy.
Monthly, quarterly, or annual compounding mirrors exactly how your CD accrues interest day to day.
See your balance, interest earned, penalty, and the exact amount you get back — all in one view.
Compare your payout against holding to maturity so you know the true cost of breaking your CD early.
A CD early withdrawal penalty is a fee banks charge when you cash out a certificate of deposit before its maturity date. It is almost always expressed as a number of days or months of interest — 90 days for short terms, 180 days (6 months) for most terms of 12 months or longer, and up to 365 days for 5-year CDs — though some institutions charge a flat percentage of your principal instead. The penalty is subtracted from your balance at withdrawal, and if you have not earned enough interest to cover it, the bank can deduct from your original deposit.
Because penalties scale with your rate and balance, they can be surprisingly large. On a $50,000 CD at 5%, a 6-month penalty is $1,250 — before you earn a single extra dollar of interest. Understanding the penalty before you open a CD, and again before you break one, is the difference between a costly mistake and a smart financial move.
Banks use two main penalty styles, and they behave very differently. Days-of-interest penalties (90, 180, or 365 days) are calculated as (rate ÷ 12) × penalty months × principal. They grow with your rate — a 6-month penalty on $10,000 costs $250 at 5% but only $150 at 3%. Percent-of-principal penalties are flat: 1% of $10,000 is always $100, regardless of your rate.
In a high-rate environment, percentage penalties are usually the better deal; in a low-rate environment, days-of-interest penalties tend to be cheaper. Many banks also waive the penalty entirely on interest-only withdrawals — you can take the interest your CD has already earned without touching the principal, which keeps the penalty at zero. Check your agreement, because policies vary widely even between accounts at the same bank.
The decision comes down to three numbers: the penalty you will pay, the interest you give up, and the cost of the alternative (a loan, a credit card balance, or dipping into a retirement account). If the penalty and forgone interest together are smaller than the interest or fees you would otherwise pay, breaking the CD can be the rational choice. If you are close to maturity, waiting almost always wins — the forgone interest of the final weeks usually exceeds any penalty you are trying to avoid.
Before deciding, run your exact numbers through this calculator, then read your CD agreement to confirm the penalty basis, whether the penalty can exceed your earned interest, and whether your bank allows partial withdrawals. When in doubt, ladder your CDs and keep a separate emergency fund so you are never forced to break a CD at the worst possible time.
⚠️ Disclaimer: The exact early withdrawal penalty depends on your bank's or credit union's terms — always check your CD agreement before withdrawing. Rates and penalty policies shown here are common examples, not guarantees. This calculator provides estimates for planning purposes only and is not financial advice.