Savings
APY Calculator
Calculate the Annual Percentage Yield (APY) from an interest rate and compounding frequency.
Enter an interest rate and how often it compounds to see the APY—the effective annual rate you'll actually earn.
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Example
A 4.5% interest rate compounded monthly gives an APY of about 4.59%, meaning you'll earn $459 on a $10,000 deposit in one year.
Results
Annual Percentage Yield
4.6%
Interest earned
$459
Future value
$10,459
Projection
Distribution view
Milestones
Decision cues
Breakdown
Cost mix
Result reading
APY is the effective annual rate that includes compounding. Use it to compare accounts on an equal basis!
Planning cue
Use the output as a scenario test rather than a promise. Small input changes can materially change the result.
APY is the effective annual rate that includes compounding. Use it to compare accounts on an equal basis!
How it works
What the result is showing you
These sections explain what the calculator measures, which assumptions matter most, and where the number can be misleading.
APY vs APR—what's the difference?
APR (Annual Percentage Rate) is the base interest rate. APY (Annual Percentage Yield) includes the effect of compounding. The more frequently interest compounds, the higher the APY will be compared to the APR.
Why compounding frequency matters
Compounding means you earn interest on interest. Monthly compounding is better than annual, and daily is better than monthly. The difference adds up over time, especially with larger balances.
Comparing APYs across accounts
When comparing savings accounts, CDs, or money market accounts, always compare APYs, not APRs. APY lets you compare accounts with different compounding frequencies on an equal basis.
FAQ
Frequently asked questions
Quick answers to the questions people ask most about this calculator.
What's the formula for APY?
APY = (1 + r/n)^n - 1, where r is the annual interest rate and n is the number of compounding periods per year. We calculate this automatically for you!
Is higher compounding always better?
Yes, for the same APR. Daily compounding will give you slightly more than monthly, which gives more than annual. But if one account has a higher APR but less frequent compounding, compare the APYs!
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