🏦 APY Calculator
Calculate APY from interest rate and compounding
How APY Calculation Works
Formula
APY = (1 + r/n)^n − 1
- 1Enter the nominal annual interest rate (APR).
- 2Select the compounding frequency (daily, monthly, quarterly, annually).
- 3The calculator applies the APY formula: (1 + r/n)^n − 1.
- 4r is the annual rate as a decimal, n is the number of compounding periods per year.
- 5The result shows how much more you earn compared to simple interest.
About APY Calculator
Calculate Annual Percentage Yield (APY) from interest rate and compounding frequency. Compare savings accounts, CDs, and investment returns. See how compounding boosts earnings.
Frequently Asked Questions
What is the difference between APR and APY?
APR is the simple annual rate without compounding. APY includes the effect of compound interest, so it's always equal to or higher than APR. APY shows your true annual return.
Does compounding frequency matter?
Yes. More frequent compounding produces a slightly higher APY. At 5% APR: annual compounding gives 5.00% APY, monthly gives 5.12% APY, and daily gives 5.13% APY.
What is a good APY for a savings account?
As of recent years, high-yield savings accounts offer 4-5% APY, while traditional banks may offer 0.01-0.1%. Always compare APY (not APR) when shopping for savings accounts.