Enter the number of times in a year that interest on your certificate of deposit (CD) is compounded. Compounding increases the amount of interest you earn on a CD. For example, if the institution compounds interest every three months (quarterly) on a CD with a simple rate of 10%, your annual percentage yield (APY) is 10.38%. If compounded monthly, you earn 10.47%. If compounded daily, you earn 10.52%. For a $10,000 deposit, daily compounding adds up to an extra $52 in interest that you earn over the simple yield.