High-Yield CD Early Withdrawal Penalty Optimizer
Run the math on whether it is worth breaking a certificate of deposit before maturity. Enter your balance and the bank’s penalty in months of interest, then compare how much interest you would forfeit versus the return a replacement account must deliver to come out ahead.
Informational estimate only—confirm penalty formulas with your bank before redeeming a CD early.
Examples
- $50,000 balance, 6-month penalty, 4.50% CD APY, 12 months remaining, 5.00% alternative ⇒ Penalty cost forfeited today: $1,125.00 • Break-even alternative APY: 6.75% • Projected net gain vs staying: -$875.00
- $30,000 balance, 3-month penalty, 4.30% CD APY, 18 months remaining, 5.90% alternative ⇒ Penalty cost forfeited today: $322.50 • Break-even alternative APY: 5.02% • Projected net gain vs staying: $397.50
FAQ
Does the calculator assume the penalty reduces my principal?
No. The tool treats the penalty as interest forfeited today while keeping your original principal available to reinvest, matching how most banks handle early redemptions.
How can I evaluate a partial withdrawal?
Enter only the amount you plan to withdraw in the CD balance field. The penalty and comparisons scale to that portion of the certificate.
What alternative APY should I try?
Use the advertised APY of the account, Treasury bill, or bond you would move into. Testing multiple APYs shows the yield hurdle you must clear to offset the penalty.
What if my CD matures in just a few weeks?
Set the months-remaining field to the nearest month. With very little time left, the break-even APY climbs quickly because there is not enough time for a new account to recover the forfeited interest.
Additional Information
- Penalty cost assumes simple interest forfeiture based on the CD APY and the published number of months.
- Replacement yield is treated as simple interest over the remaining CD term to keep the comparison apples-to-apples.
- Taxes, withdrawal service fees, and market value adjustments are not included in the estimate.