GIC and CD Calculator

The simplest engine on the site, and deliberately so. Your balance earns the yield you set; the interest is added once a year, and it compounds. That is genuinely how a GIC or a CD behaves when you hold it to the end, which is why this tab has fewer switches than the others and why the “doubles in” figure is a real answer rather than an estimate.

Monthly additions are added at the end of each year rather than spread throughout it, so a year’s deposits start earning in the year after they are made. That understates things slightly, which is the right direction to be wrong in. Additions can rise with inflation, and they can change partway through, because what you can set aside at thirty is rarely what you can set aside at fifty.

Withdrawals come in three shapes, and they behave differently on purpose. A fixed amount is the one that can empty the account, and the tab tells you in which year. The same amount, rising with inflation, empties it sooner and preserves its purchasing power while it lasts. A percentage of the balance each year cannot fully empty it, because you are always taking a share of what is left rather than a set sum, and the income moves with the balance in both directions. Withdrawals can start in a later year and can run in up to three stages, counted from the year they begin, so pushing the start date back slides the whole plan rather than eating the first stage.

The rate shock is not part of the projection. It draws a second line showing what the holding would fetch if you sold it before maturity after rates moved, scaled by how many years are left to run: a long bond falls much further than one about to mature. Held to the end, none of that touches you, and you receive the yield you agreed to. GICs and CDs cannot be sold at all, so the line for those is hypothetical.

What this does not model is the rest of what makes a bond a bond. There is no credit risk here: every payment arrives, and issuers do occasionally default. Bonds that can be called back early are not modelled, though a falling-rate world is exactly when that happens and exactly when it hurts. There is no ladder, no rate path, and no bond fund — one yield is assumed to hold for the whole term, so the risk of renewing maturing money at a worse rate does not appear anywhere. And interest is normally taxed as ordinary income rather than at capital-gains rates, while the tax setting here applies the capital-gains treatment, so it flatters this tab more than any other.