CD Calculator — Tennessee 2026
Calculate Certificate of Deposit interest for Tennessee residents. Tennessee has no state income tax — CD interest is taxed at the federal level only.
Quick Answer
A $10,000 CD at 4.5% APY earns $459.63 in 12 months (monthly compounding) — ending at $10,459.63 before taxes. As a Tennessee resident with no state income tax, the $459.63 interest is only subject to federal income tax. CDs are FDIC-insured up to $250,000.
Your CD Details
CD Maturity Value — 1 Year
Final Balance
$10,459.40
Interest Earned
$459.40
Effective APY
4.594%
Your $10,000.00 deposit earns $459.40 in interest — a 4.59% total return. Interest is taxable as ordinary income in the year it is received or credited.
Growth Timeline
| Month | Interest This Period | Cumulative Interest | Balance |
|---|---|---|---|
| Month 1 | $37.50 | $37.50 | $10,037.50 |
| Month 3 | $37.78 | $112.92 | $10,112.92 |
| Month 6 | $38.21 | $227.12 | $10,227.12 |
| Month 9 | $38.64 | $342.61 | $10,342.61 |
| Month 12 | $39.08 | $459.40 | $10,459.40 |
CD Taxation in Tennessee
State income tax rate: 0%
CD interest taxed by Tennessee: No — no state income tax
Federal tax on CD interest: Yes — taxed at ordinary income rates (10%–37%)
1099-INT reporting: Your bank reports interest over $10 to the IRS and your state (if applicable)
Tennessee eliminated its Hall income tax in 2021. CD interest is now subject to federal income tax only for Tennessee residents.
CD FAQs — Tennessee
How is CD interest taxed in Tennessee?
CD interest is taxed as ordinary income in Tennessee. Tennessee eliminated its Hall income tax in 2021. CD interest is now subject to federal income tax only for Tennessee residents. At the federal level, CD interest is taxed at your marginal rate (10%–37%). Combined federal and Tennessee state tax on CD interest: 37% maximum (federal only — no state tax). Your bank will issue a 1099-INT for any interest over $10.
What is the best CD rate in Tennessee right now?
CD rates in Tennessee follow national market rates since they are set by banks and credit unions, not state governments. As of 2026, competitive CD rates range from 4.0% to 5.5% APY. Online banks typically offer higher rates than local branches. Check Tennessee-based credit unions for competitive local rates. The FDIC rate tracker and Bankrate provide current top CD rates available to Tennessee residents.
Are CDs FDIC-insured in Tennessee?
Yes — CDs at any FDIC-member bank are federally insured up to $250,000 per depositor, per institution, per ownership category. This applies equally to all Tennessee residents regardless of state laws. Credit union CDs are insured by the NCUA up to the same $250,000 limit. Tennessee residents can open CDs at any FDIC or NCUA-insured institution nationwide — in person or online.
Should I put my savings in a CD or a high-yield savings account in Tennessee?
The choice depends on your liquidity needs and rate expectations. CDs offer a guaranteed, locked-in rate — ideal if you won't need the money for a set period and want certainty. High-yield savings accounts are more flexible (no penalty for withdrawal) but rates can change. In Tennessee with no state income tax, both CDs and savings accounts benefit from the same state tax advantage — only federal taxes apply.
What is the early withdrawal penalty for CDs in Tennessee?
Early withdrawal penalties are set by individual banks, not by Tennessee state law. Common penalties: 3 months of interest for CDs under 1 year, 6 months of interest for 1–2 year CDs, and 12 months of interest for 3–5 year CDs. Some banks offer no-penalty CDs at slightly lower rates. Before opening a CD as a Tennessee resident, understand the penalty terms in case you need the funds before maturity.