Real Return Calculator: CD Interest After Tax and Inflation
See what a deposit earns over one year, then account for taxes and lost purchasing power. The latest published CPI-U year-over-year rate is a starting scenario, not a forecast.
-$54.41 real purchasing-power change
| Starting deposit | $10,000.00 |
|---|---|
| Nominal interest | $435.00 |
| Federal + state tax on interest | $117.45 |
| After-tax balance | $10,317.55 |
| Inflation adjustment | $371.96 |
| Ending balance in today's dollars | $9,945.59 |
Break-even APY: 5.12%, at 22% federal tax, 5% state tax and 3.74% inflation.
Latest published CPI-U: 3.74% year over year for 2026-09 (monthly BLS release). You can change the inflation scenario. Historical CPI is not a prediction.
Current nationwide reference: Popular Direct · 4.60% APY · Certificate of Deposit · verified October 22, 2026. The entered APY may differ; check all product conditions.
Real return and break-even APY
Inflation reference: BLS Consumer Price Index, CPI-U year-over-year change, published monthly.
Real ending balance = [deposit + interest × (1 − federal tax − state tax)] / (1 + inflation). Break-even APY = inflation / (1 − federal tax − state tax). Use decimal rates in the formulas.
This is a one-year estimate with taxes paid from interest at year end. It excludes local taxes, deductions, tax interactions, fees and early withdrawal penalties. A negative break-even APY in a deflation scenario means even a zero-yield deposit can gain purchasing power.
Questions
Do CDs beat inflation after taxes?
It depends on the APY, your tax rates and inflation over the holding period. This calculator shows the one-year change in purchasing power under the entered assumptions.
Is the CPI rate a forecast?
No. It is the latest published year-over-year CPI-U reading, updated monthly by BLS. Future inflation can differ, and the inflation input is editable.
Why not just subtract inflation from APY?
An exact real-return estimate divides the after-tax ending balance by the inflation factor. Simple subtraction is an approximation and ignores taxes.
What does break-even APY mean?
It is the one-year nominal APY that preserves starting purchasing power under the tax and inflation assumptions entered here.
Are the tax defaults personalized?
No. Federal and state defaults are illustrative marginal rates. Enter the rates that apply to your interest income.
Sources and assumptions
See the APY calculation rules, CFPB guide to CDs, and IRS guidance on interest income. Results are estimates based on the inputs and assumptions above; account disclosures control actual payouts and penalties.