High-Yield Savings vs CD Calculator

No. Both are ordinary taxable income at your regular federal (and state) marginal rate — neither gets a lower, capital-gains-style rate. The bank reports both on Form 1099-INT once interest reaches $10 for the year, and you include the full amount in taxable income for the year it's credited, even on a multi-year CD where the interest rolls back into principal instead of being paid out.

Not directly. Since HYSA and CD interest are taxed at the identical marginal rate, your bracket scales both after-tax totals down by the same percentage — it changes how much of the win you keep, not which account wins. The exception is when you model an early CD withdrawal: the bank's penalty is a real dollar cost that a higher after-tax HYSA return can outrun even if the CD's stated APY was higher.

Yes. The bank reports the forfeited interest separately, in Box 2 of Form 1099-INT, and IRS instructions describe it as "deductible from gross income by the recipient." You claim it as an above-the-line adjustment to income on Schedule 1 (Form 1040), Part II, Line 18 — "Penalty on early withdrawal of savings" — available whether you itemize or take the standard deduction.

It's the CD's nominal APY at which its after-tax earnings would exactly match the HYSA's after-tax earnings over the same period, given any early-withdrawal penalty you've modeled. Because both interest streams — and the penalty deduction — get the same marginal tax treatment, the breakeven APY doesn't change with your tax bracket; it only depends on the term, the penalty, and the HYSA rate you're comparing against.

Without an early withdrawal, whichever account has the higher nominal APY also has the higher after-tax return, since tax reduces both proportionally by the same combined rate. The calculator still reports the after-tax dollar amounts and effective yield so you can see exactly how much of the stated rate you actually keep.

No — unlike a CD, a HYSA's APY is variable and can be cut at any time, which is the tradeoff for its liquidity. This calculator holds the HYSA rate constant for the comparison period as a simplifying assumption; if you expect rate cuts, the CD's locked-in rate is worth more than the calculator shows.