CD and Treasury Ladder Comparison Calculator

Purpose and model boundary

This calculator compares a ladder of up to 10 certificates of deposit (CDs) with a ladder of up to 10 US Treasury securities, all bought today at par and held to maturity. You enter each CD's term in months, its rate as a yearly yield (APY), its amount and its early-withdrawal penalty in months of interest, each Treasury's term, yield and amount, your federal and state income tax rates, and the rate you could earn today if you broke a CD. The main result is the gap between the two ladders' blended yields after tax, the Treasuries' minus the CDs': positive when the Treasuries pay more after tax, negative when the CDs do. The page also shows each ladder's blended yield after tax, the CD rate that would match the Treasuries after tax, and how many months your longest CD, if broken today, would need at the new rate to earn back its penalty.

Every figure on this page is computed by the spreadsheet; the page adds nothing to it. To see one balance grow at a steady rate, use the Compound Interest Growth Calculator; for the price and interest-rate risk of a bond, the Bond Price Yield Duration Convexity Calculator; and for another break-even between paying a cost now and saving later, the Balance Transfer Break Even Calculator.

The model is educational. It does not quote rates, and it is not financial, investment, tax or legal advice.

Inputs and units

• Your CDs, one per row from the first, up to 10. Each row you use needs its term, a whole number of months from 1 to 120; its rate as a yearly yield (APY), from 0% to 20%; its amount, from 1 to 1,000,000,000 dollars; and its early-withdrawal penalty, a whole number of months of interest from 0 to 60. Blank rows are skipped.
• Your Treasuries, one per row, up to 10. Each row you use needs its term in months, from 1 to 120; its yield as a yearly rate, from 0% to 20%; and its amount, from 1 to 1,000,000,000 dollars.
• Federal income tax rate, from 0% to 50% of the interest. Both CD and Treasury interest pay it.
• State income tax rate, from 0% to 15% of the interest. CD interest pays it; Treasury interest is exempt.
• Rate you could earn if you broke a CD now, from 0% to 20% a year.

At least one CD and one Treasury are required. Money is in US dollars; rates and yields are yearly percentages.

Governing relationships

For a rung of amount A, yearly yield r and term M months:

• each full year of the term pays A × r of interest, at the anniversary;
• a final part year of k = M − 12 × (whole years) months pays A × ((1 + r)^(k/12) − 1), at maturity;
• the principal comes back in the year the rung matures.

CD interest after tax is the interest × (1 − federal rate − state rate); Treasury interest after tax is the interest × (1 − federal rate), because Treasury interest is exempt from state income tax. A ladder's blended yield is its total interest divided by its dollar-years, the sum of A × M / 12 over its rungs, before or after tax; for whole-year terms it is the average of the rates weighted by amount and term. The gap is the Treasuries' blended yield after tax minus the CDs'. The CD rate that would match the Treasuries after tax is

matching CD rate = Treasury blended yield after tax / (1 − federal rate − state rate)

The break-even uses your longest CD (the first of several with the same term). Breaking it today costs a penalty of P months of simple interest at its rate, A × r × P / 12. With the rest put to work at the new rate R, simple interest both ways, you are ahead after m months by

gain(m) = (A − penalty)(1 + R × m / 12) − A (1 + r × m / 12)

The break-even month is the first whole month, from 1 to 120, at which that gain counts as even, that is, at least −0.000000001 × A. That allowance of one billionth of the CD amount absorbs rounding, so the reported month can fall just before the exact crossing, for example month 119 for a crossing at 119.001 months, while the gain is still negative by no more than that tiny amount. 0 means it never happens within 10 years. Breaking pays when that month comes by the CD's maturity, the maturity month itself included. The exact crossing, 12 × penalty / ((A − penalty) R − A r) when the divisor is positive, is the check the workbook holds the month against, with the same allowance.

Calculation sequence

The spreadsheet first checks every row and input. It then fills one block per rung with the interest in each of 10 years, before and after tax, and the principal back; totals them by year for each ladder; and works out each ladder's dollar-years and blended yields, the gap and the matching CD rate. For every CD it writes the gain from breaking for each month from 1 to 120 and reads the first month whose gain is within that allowance of zero or above it, beside the exact crossing. The scalar break-even results are read for the longest CD, and a block of consistency checks confirms the arithmetic before the status is returned.

Outputs and interpretation

The headline is the after-tax yield gap, in percentage points. Beside it are the CDs' and the Treasuries' blended yields after tax, the break-even month for your longest CD and the CD rate that would match the Treasuries after tax. The tables show the interest and principal by year and each CD and each Treasury rung by rung, with each CD's penalty in dollars, its own break-even month and whether breaking it pays. The two blended yields before tax, the two ladders' interest after tax and its difference, the exact crossing, which CD the break-even is for, whether breaking it pays and the workbook's self-check are returned to the API and MCP.

With the default inputs, one 24-month CD at 4.5% and one 24-month Treasury at 4.2%, 10,000 dollars each, a 22% federal and a 5% state tax rate, the CD yields 3.285% after tax and the Treasury 3.276%, so the gap is −0.009 points: the CD pays very slightly more. A CD would have to pay about 4.488% to match the Treasury after tax. Breaking the CD costs 225 dollars of penalty, and at a new rate of 5% it takes 70 months to earn that back, well after the 24-month CD would have matured, so breaking it does not pay. In the high-tax example, the same five-rung ladders at a 35% federal and 9.3% state rate, the gap turns to +0.249 points in the Treasuries' favour; with no state tax it is −0.166 points. In the example that asks whether to break a five-year CD at 3.5% when rates rise to 5.5%, the penalty is earned back after 24 months, long before the 60 months are up, so breaking pays.

The first chart sets each ladder's interest after tax side by side for each year, and the second the principal each ladder returns as its rungs mature. The third draws the gain from breaking your longest CD for each month, from minus the penalty at month 0 up to the break-even, which the dashed line marks; when breaking never pays within 10 years, there is no dashed line.

Validation and status logic

The workbook evaluates the conditions below from top to bottom and returns the first matching status.

NOT VALID is a refusal, not a numeric answer: every number reads zero, breaking reads No and the tables are empty. CHECK accompanies a computed result but calls for the stated review. A negative gap, or a CD that never earns back its penalty, is a result, not a warning. The self-check is reported separately as arithmetic-integrity evidence; it does not replace this ordered status chain.

Assumptions and limitations

Rates are yearly effective yields paid at each anniversary and at maturity; Treasury bills' discount pricing, notes' twice-yearly coupons and CDs that compound to maturity are not modelled. Every rung is bought today at par and held to maturity, except the one break-even question, and no Treasury is sold early. Each tax is one flat rate on all the interest, and the deduction of state tax on the federal return is ignored. The penalty is stated as months of simple interest at the CD's rate, the common way banks state it; your own CD's terms may differ. The break-even is worked out before tax and with simple interest both ways. Amounts are nominal dollars.

Restrictions and non-computing states

This calculator enforces its numeric limits before it accepts a result. Terms and penalties are whole numbers of months, every used row must be complete, and at least one CD and one Treasury are needed. The break-even is searched over 120 months; a CD that never earns back its penalty within them reads 0.

Errors and warnings

A request rejected by the page's input limits is not a computed result. A transport or service failure cannot establish a fresh workbook answer. Review the workbook's References and Disclaimer, and check your own CD's terms and your tax position with a qualified professional before buying or breaking a CD.

Sources and further reading

The terms, rates, amounts, penalties and tax rates come from the inputs, not market data: the model is arithmetic on what you enter, and it uses no table, rate or figure from any publication. The workbook's References sheet identifies the sources below. The links explain the rules the model follows; they do not endorse this calculator.

• IRS Publication 550, Investment Income and Expenses (2025), "U.S. Treasury Bills, Notes, and Bonds", says that interest on these securities is subject to federal income tax but exempt from all state and local income taxes, which is why the calculator taxes Treasury interest at the federal rate only and CD interest at both (retrieved 2026-10-18).
• Microsoft Support's MATCH and SUMPRODUCT documentation describe the functions the workbook uses to read the first break-even month and to add the principal by year.

The penalty convention, a number of months of simple interest at the CD's rate, is the common way banks state an early-withdrawal penalty; the terms of your own CD decide what you would pay.

This is an educational estimate, not financial, investment, tax or legal advice. Rates change, CD terms and penalties differ between banks, and tax rules differ from person to person; check any decision with a qualified professional.