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APY Calculator
Enter a quoted interest rate and how often it compounds. You get the yield for a full year and the interest on your deposit.
| Compounding | APY | Interest in one year |
|---|---|---|
| Annually | 4.5% | $450.00 |
| Quarterly | 4.577% | $457.65 |
| Monthly | 4.594% | $459.40 |
| Daily | 4.602% | $460.25 |
Example
A 4.5% rate compounded monthly gives an APY of 4.594%. On $10,000 that is $459.40 of interest in one year.
How the apy calculator works
APY is the return over one year once compounding is included: APY = (1 + r/n)n − 1, where r is the quoted rate and n the number of compounding periods per year.
The more often interest compounds, the higher the APY, though the gain from each step gets smaller. Moving from monthly to daily adds very little.
When comparing savings accounts, compare APY with APY. For loans, the same maths works against you: more frequent compounding means a higher effective cost.
Common questions
What is the difference between APR and APY?
APR is the yearly rate without compounding. APY includes compounding, so it is the amount you really earn or pay over a year. APY is equal to or higher than APR.
Do banks advertise APR or APY?
Savings products are usually advertised with the yield, because it is the larger figure. Loans are usually advertised with the rate. Check which one you are looking at before comparing.
Is the APY guaranteed?
Only on fixed-rate products. On a variable-rate account the bank can change the rate, and the yield changes with it.