Monday, February 12, 2007

Analyzing CD Terms

The Yahoo! Finance CD Analyzer is, by far, my favorite CD interest calculator. Not only does it tell you how much interest you will earn, this calculator also takes into account your tax bracket, so you can see the tax bite of your CD investment as well.

This month, my local WaMu branch has a 10-month CD with 5.28% APY. Being in the 25% tax bracket, this CD would translate for me thus:

With multi-year CD's, this calculator also provides an accompanying graph listing each year's tax bite. Even though you can pencil & paper this math, a nifty online calculator makes it so much faster, doesn't it? The only drawback is that you must remember to input the CD's APR, not its APY.

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