Every CD has a specific maturity, the date when you're allowed to withdraw your funds without paying a penalty. Banks and credit unions typically offer a range of certificates that appeal to customers with either a short-term savings horizon (as is the case with a 6-month CD) or a long-term horizon. For each CD duration, the institution will publish the annual percentage yield, or APY, which reflects the percentage of interest paid on the account, given the nominal interest rate and the frequency with which that interest is compounded. Most CDs use compound interest, which slightly increases the yield. In the case of a certificate that compounds daily, the annual interest rate is divided by 365 and multiplied by the balance to determine the interest payout. That daily interest accrual is then added to the balance when calculating the next day's interest. Interest is usually credited to the account monthly or quarterly.