Sewickley Savings Bank CD Rates Calculator

CD Interest Formula:

\[ A = P \times (1 + r/n)^{n \times t} \]

Principal Amount (P):

Annual Interest Rate (r):

Compounding Periods per Year (n):

times/year

Time Period (t):

years

Future Value (A):

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1. What is the CD Interest Formula?

The compound interest formula calculates the future value of a certificate of deposit (CD) investment at Sewickley Savings Bank. It accounts for the principal amount, annual interest rate, compounding frequency, and time period to determine the total amount earned.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ A = P \times (1 + r/n)^{n \times t} \]

Where:

\( A \) — Future value of the investment
\( P \) — Principal investment amount
\( r \) — Annual interest rate (in decimal form)
\( n \) — Number of compounding periods per year
\( t \) — Time the money is invested for (in years)

Explanation: The formula calculates how much your CD investment will grow over time with compound interest, which means you earn interest on both your initial principal and the accumulated interest from previous periods.

3. Importance of CD Rate Calculation

Details: Accurate CD rate calculation helps investors understand potential returns, compare different CD options, and make informed financial decisions about their savings at Sewickley Savings Bank.

4. Using the Calculator

Tips: Enter the principal amount in dollars, annual interest rate as a percentage, number of compounding periods per year, and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is compound interest?
A: Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods, allowing your investment to grow at an accelerating rate.

Q2: How often do CDs typically compound?
A: CDs can compound daily, monthly, quarterly, or annually. More frequent compounding generally results in higher returns.

Q3: Are CD rates fixed or variable?
A: Most CDs from Sewickley Savings Bank offer fixed interest rates for the term of the CD, providing predictable returns.

Q4: What happens if I withdraw my CD early?
A: Early withdrawal from a CD typically results in penalties, which may reduce your principal and earned interest.

Q5: Are CD investments FDIC insured?
A: Yes, CDs offered by Sewickley Savings Bank are FDIC insured up to the maximum allowed by law, providing security for your investment.