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APY Calculator
Annual percentage yield (APY) reflects the effect of compounding over a year. Enter the nominal annual rate and how often interest compounds to estimate the effective annual yield. This estimate assumes a fixed rate and no deposits or withdrawals.
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How this apy calculator works
Calculate annual percentage yield (APY) from an annual nominal interest rate and compounding frequency to compare savings account returns.
APY = (1 + nominal annual rate ÷ compounding periods)compounding periods − 1.
Formula and assumptions
The calculation uses the values you enter and assumes the stated rate stays constant for the selected period. Actual account results can differ because of rate changes, timing, fees, taxes, rounding, deposits, withdrawals, or provider-specific rules.
For APY methodology, see the Consumer Financial Protection Bureau’s APY calculation rules. For CD terms, review the CFPB’s guide to certificates of deposit.
Frequently asked questions
Are these results guaranteed?
No. This tool provides an estimate based on your inputs. It does not guarantee a bank rate, investment return, or future purchasing power.
Can I use this calculator outside the United States?
Yes. Enter amounts in your preferred currency and interpret the result in that same currency. The calculator does not convert currencies or fetch live exchange rates.
Related financial calculators
For education only. This calculator is not financial, tax, or investment advice.
APY Calculator Examples
Annual percentage yield (APY) shows how much interest an account earns over one year when compounding is included. For example, a nominal annual rate of 4.5% compounded monthly produces an APY of approximately 4.59%. The actual amount earned depends on your balance, rate, compounding rules, fees and account terms.
Worked example: With $1,000 deposited for one year at a 4.5% nominal annual rate compounded monthly, the balance would grow to about $1,045.94 before any fees or taxes, assuming the rate remains unchanged and no money is added or withdrawn.
How Compounding Frequency Affects APY
With the same nominal annual interest rate, more frequent compounding generally results in a slightly higher APY. The table below illustrates this using a 4.5% nominal annual rate.
| Compounding schedule | Periods per year | Approximate APY |
|---|---|---|
| Annually | 1 | 4.50% |
| Semi-annually | 2 | 4.55% |
| Quarterly | 4 | 4.58% |
| Monthly | 12 | 4.59% |
| Daily | 365 | 4.60% |
These values are illustrative and rounded. A financial institution may calculate and disclose APY according to applicable rules and its account terms.
APY vs. APR: What Is the Difference?
APY reflects the effect of compounding over a year and is useful when comparing interest earned on savings products. APR means annual percentage rate; depending on the financial product and applicable rules, it may describe the annual cost of borrowing and may include certain fees. For savings accounts, compare the disclosed APY and check minimum balances, fees, withdrawal restrictions and whether the rate is variable.
Frequently Asked Questions
Is a higher APY always better?
A higher APY can mean more interest earned on a savings balance, but also compare fees, minimum deposit requirements, access restrictions, rate conditions and account protections before choosing an account.
Why is APY usually higher than the nominal interest rate?
When interest is compounded more than once a year, earned interest can itself earn interest. This makes the effective annual yield higher than the nominal rate, assuming a positive rate and the stated compounding schedule.
Does this APY calculator include taxes or account fees?
No. It estimates APY from the nominal annual rate and compounding frequency you enter. Taxes, fees, changing rates, deposits and withdrawals are not included.
Can I compare savings accounts with different compounding schedules?
Yes. APY is designed to reflect annual compounding effects, so it can help compare yields. Also review each provider’s terms and any conditions attached to the advertised rate.