Compound interest can help turbocharge your savings and investments or quickly lead to an unruly balance, stuck in a cycle of debt. Learn more about what compound interest is and how it works.

In this guide, we’ll explain how CD interest is calculated, break down simple vs. compound interest and provide real-life examples to help you understand how much you can earn.

Most CDs compound interest daily, so n = 365. Check with your bank to verify the interest is compounded daily. t is time or the number of periods until the maturity date.

There is simple interest, which, as the name implies, is the simpler form of interest to understand and calculate, and then there is compound interest.