📈 APY Calculator
Convert an interest rate to its annual percentage yield (APY) for any compounding frequency, and see one year of interest.
How the APY Calculator Works
The annual percentage yield (APY) is the real yearly return on a deposit once compounding is included. Banks often quote a nominal interest rate that compounds several times a year; because interest earned early in the year also earns interest, the effective return is higher than the stated rate. APY puts every account on the same footing so offers with different compounding schedules can be compared directly.
Enter the stated annual rate and how often it compounds. The calculator shows the APY and, if you add a deposit, how much interest that deposit would earn in one year at a constant rate. Continuous compounding is the theoretical maximum for a given rate.
Formula
APY = (1 + r ÷ n)^n − 1 Continuous compounding: APY = e^r − 1 One year of interest = deposit × APY r = stated annual rate (decimal), n = compounding periods per year
How to Use It
- Enter the stated annual interest rate.
- Choose how often interest compounds.
- Optionally enter a deposit amount.
- Read the APY and one year of interest.
Frequently Asked Questions
What is the difference between APY and interest rate?
The interest rate is the stated yearly rate before compounding. APY includes the effect of compounding, so it is equal to the rate when interest compounds once a year and higher when it compounds more often.
How do you calculate APY?
APY = (1 + r/n)^n − 1, where r is the annual rate as a decimal and n is the number of compounding periods per year. A 5% rate compounded monthly gives (1 + 0.05/12)^12 − 1 ≈ 5.12%.
Does daily compounding make a big difference?
Going from monthly to daily compounding adds only a small amount; the biggest jump is from annual to monthly compounding. At 5%, monthly gives about 5.116% APY and daily about 5.127%.
Is APY the same as APR?
No. APY includes compounding and is typically used for savings; APR does not include compounding and is typically used for loans.
Related Glossary Terms
Related Calculators
- 🏦 CD Calculator — See what a certificate of deposit is worth at maturity, with APY and total interest.
- 📈 Compound Interest Calculator — See how your money grows with compound interest and regular monthly contributions.
- 🎯 Savings Goal Calculator — Find out how much to save each month to hit your target.
- 🧾 APR Calculator — Find a loan’s true APR including origination and other upfront fees.
Formula and content last reviewed: September 2026. All calculations run in your browser — nothing you enter is sent to or stored on our servers.
Guide: understanding your result
- APY (annual percentage yield) is the interest you actually earn in a year once compounding is included.
- APY = (1 + r ÷ n)^n − 1, where r is the stated annual rate and n the number of compounding periods per year.
- Banks must disclose APY on deposit accounts, so it is the right number for comparing savings accounts and CDs.
Worked example
A savings account paying 4.00% compounded daily has an APY of 4.081%. On $10,000 that is about $408.08 of interest in a year, versus $400.00 with no compounding.
APY by stated rate and compounding frequency
| Stated rate | Annually | Quarterly | Monthly | Daily |
|---|---|---|---|---|
| 2% | 2.000% | 2.015% | 2.018% | 2.020% |
| 3% | 3.000% | 3.034% | 3.042% | 3.045% |
| 4% | 4.000% | 4.060% | 4.074% | 4.081% |
| 5% | 5.000% | 5.095% | 5.116% | 5.127% |
Common mistakes to avoid
- Comparing one account's APY with another account's interest rate.
- Assuming a promotional APY lasts — many are introductory or variable.
Official sources
Examples are calculated live from the same data the calculator uses and are for education only — they are not financial, tax or investment advice.
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See all →✔ Reviewed by GelirLab Editöryal Ekibi · Last reviewed: September 2026 · How we check our calculators