Glossary
Plain-language definitions for the terms used across this site's calculators and guides. Each entry links to the page that covers it in full.
APR (Annual Percentage Rate)
The nominal annual interest rate before the effect of compounding is applied. APR is always equal to or lower than APY for the same account. See the APY Calculator to convert between the two.
APY (Annual Percentage Yield)
The actual rate of return over a year, including the effect of compounding. Banks are required to advertise APY rather than a bare nominal rate, since it gives a standardized way to compare accounts. See What Is APY for the full explanation.
Barbell CD Ladder
A CD ladder variation that puts money at the two ends of the term range only, short and long, skipping the middle terms entirely. See How CD Laddering Works for the full strategy breakdown.
Bullet CD Strategy
A CD-buying strategy where CDs are purchased at different times but all target the same maturity date, useful for building toward a known future expense. See How CD Laddering Works.
CD Ladder
Splitting a deposit across several CDs with staggered maturity terms, so a portion of the money becomes available every year instead of all of it being locked up at once. Run your own numbers on the CD Ladder Calculator.
Compounding Frequency
How often interest is calculated and added back to a balance -- daily, monthly, quarterly, or annually. More frequent compounding produces a slightly higher return for the same nominal rate. See How Compounding Frequency Works.
Compound Interest
Interest calculated on both the original principal and on interest already earned, so a balance grows faster over time than it would under simple interest. See Compound Interest Formula Explained for the full formula.
Continuous Compounding
The theoretical limit of compounding frequency, as if interest compounded an infinite number of times per year. No real savings account actually compounds this way; it's mostly a concept used in academic finance. See Compound Interest Formula Explained.
Early Withdrawal Penalty
A fee charged for withdrawing money from a CD before its term ends, commonly calculated as a set number of months' worth of interest. Estimate your own cost with the CD Early Withdrawal Penalty Calculator.
Emergency Fund
Money set aside specifically for unplanned expenses, kept separate from everyday spending and investments. Commonly targeted at 3 to 6 months of essential expenses. See How to Build an Emergency Fund.
FDIC Insurance
Federal deposit insurance that protects money held at participating banks up to the standard coverage limit, in the event the bank fails. Both savings accounts and CDs are commonly covered.
High-Yield Savings Account (HYSA)
A savings account, typically at an online bank, that pays a meaningfully higher APY than a traditional savings account, while remaining liquid and FDIC-insured. Compare accounts with the High-Yield Savings Calculator.
Maturity Date
The date a CD's term ends, at which point the full balance, principal plus interest, becomes available without penalty. See the CD Calculator to project a CD's value at maturity.
Mini-Ladder
A CD ladder built with shorter, closer-together terms, commonly 3, 6, 9, and 12 months, instead of the standard 1-to-5-year spread. See How CD Laddering Works.
Nominal Rate
The stated interest rate before accounting for compounding, equivalent to APR. Convert a nominal rate to APY, or back, with the APY Calculator.
No-Penalty CD
A CD that allows a full withdrawal before maturity with no early withdrawal fee, typically in exchange for a somewhat lower rate than a standard CD. See No-Penalty CDs Explained.
Principal
The original amount of money deposited or invested, before any interest is added. Every calculator on this site uses this as its starting input.
Simple Interest
Interest calculated only on the original principal, not on interest already earned. Contrast with compound interest. See the Simple Interest Calculator.
Cedrick Reese
Savings Interest Calculator was created by Cedrick Reese, a retired veteran and web developer who enjoys building free, user-friendly online tools that simplify everyday tasks. His journey began in the early 2000s with affiliate marketing and niche site development, which grew into a passion for creating practical digital utilities and calculators. After retiring, he earned a Computer Systems Technician certificate from UEI College, completed Electro-Mechanical Technologies at Tulsa Welding School, and finished the Carpentry program at Florida State College at Jacksonville. Today he combines his technical background and craftsmanship by building furniture using traditional woodworking methods, gardening, and developing helpful online tools for users worldwide.