APY Calculator
Calculate Annual Percentage Yield (APY) and see how compound interest grows your savings.
APY Calculator
Regular Deposits (Optional)
Results
Annual Percentage Yield (APY)
vs 5.000% APR
Final Balance
In 5 years
Total Interest Earned
23.889% return
Deposits vs Interest
How it works
APY (Annual Percentage Yield) is the real rate of return once compounding is included. A nominal rate quoted as “5% compounded monthly” actually earns a bit more than 5% over a year, because each month's interest itself earns interest. APY captures that, which is why it's the honest number for comparing savings accounts and CDs.
Annual Percentage Yield
APY = (1 + r/m)^m − 1
- r
- nominal annual rate (decimal)
- m
- compounding periods per year
Worked example
- Nominal rate r = 5%
- Compounded monthly (m = 12)
- APY = (1 + 0.05/12)¹² − 1
- APY = 1.00417¹² − 1
APY ≈ 5.12% — slightly above the 5% nominal rate thanks to monthly compounding.
Good to know
- Always compare savings products by APY, not the nominal/“interest rate” — APY already folds in the compounding frequency.
- The more often interest compounds, the higher the APY, but the gap is small: daily vs monthly at 5% differs by only a couple of hundredths of a percent.
- APY assumes you leave the interest in to compound; if you withdraw it, your actual yield is closer to the nominal rate.
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Frequently Asked Questions
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Most calculators allow copying results. Consider keeping a spreadsheet or document for important calculations.
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