APY Calculator
Convert a nominal interest rate into its annual percentage yield (APY) for any compounding frequency, and see the interest earned on a balance over time.
Updated October 2026
APY is the real yearly return once compounding is counted: (1 + rate ÷ n)n − 1, where n is how often interest is added. The more often it compounds, the higher the APY for the same nominal rate — so APY is the number to compare savings accounts and CDs by, not the quoted APR.
This is an estimate for general information only and is not financial, tax or investment advice. Figures may differ from a lender or advisor.
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This APY calculator converts a nominal interest rate into its annual percentage yield — the real yearly return once compounding is included. Enter the rate and how often it compounds, and optionally a balance and time, to see the effective APY, the interest earned and the ending balance.
Banks quote a nominal rate (APR), but what you actually earn depends on how often interest is added to your balance. Daily or monthly compounding earns a little more than the nominal rate, so APY is the figure to compare savings accounts, CDs and money-market accounts by.
How to use it
- 1Enter the nominal annual interest rate (the APR the bank quotes).
- 2Choose how often it compounds — daily, monthly, quarterly or annually.
- 3Optionally add a starting balance and a time in years to see the interest earned.
- 4Read the APY, your ending balance and the interest earned.
Frequently asked questions
What is the difference between APR and APY?+
APR is the nominal yearly rate, before compounding. APY (annual percentage yield) includes compounding, so it's what you actually earn in a year. A 5% APR compounded monthly is about 5.12% APY. For savings, higher APY is better; compare accounts by APY, not APR.
How is APY calculated?+
APY = (1 + r ÷ n)^n − 1, where r is the nominal annual rate as a decimal and n is the number of compounding periods per year. For 5% compounded daily, that's (1 + 0.05 ÷ 365)^365 − 1 ≈ 5.13%.
Does more frequent compounding always mean more money?+
Yes, but with diminishing returns. Going from annual to monthly compounding adds noticeably to the yield; going from daily to continuous adds almost nothing. For a 5% rate the APY rises from 5.00% (annual) to only about 5.127% (continuous).
Is APY the same as interest rate?+
Not quite. The interest rate (APR) is the base rate; APY is that rate after compounding over a year. They're equal only when interest compounds just once a year.
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