Calculators

APY Calculator

Convert APR to APY (and APY to APR) for any compounding frequency and see what a deposit earns.

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About this tool

Annual percentage yield (APY) is the return you actually earn in a year once interest is compounded, while the nominal interest rate (often called APR) ignores compounding. Banks advertise savings accounts and CDs by APY, so converting between the two lets you compare offers fairly. Enter a rate, say whether it is the interest rate or the APY, and pick the compounding frequency: annually, semi-annually, quarterly, monthly, daily or continuously. The calculator shows both APY and APR to four decimal places, using APY = (1 + APR ÷ n)ⁿ − 1, or eᴬᴾᴿ − 1 for continuous compounding. Add a deposit and a number of years to see the ending balance and interest earned, and a table shows how the same rate yields under every compounding frequency. It assumes a fixed rate, no further deposits and no withdrawals, and runs entirely in your browser.

Why use it

  • Works both ways: APR to APY and APY back to APR.

  • Six compounding options, from annual to continuous.

  • Earnings on a deposit over any number of years.

  • Comparison table shows the APY for every compounding frequency at once.

  • Shows the formula, so you can check the maths yourself.

How to use

  1. Choose whether you know the interest rate (APR) or the APY, and type the rate.
  2. Pick the compounding frequency stated by the bank.
  3. Optionally enter a deposit and the number of years.
  4. Read the APY, APR, ending balance and the comparison table.

When it helps

  • Comparing a savings account quoted as an interest rate with one quoted as APY.
  • Checking that a bank's advertised APY matches its interest rate and compounding.
  • Seeing how much difference daily versus monthly compounding really makes.
  • Estimating a year's interest on an emergency fund or high-yield savings balance.

Examples

Monthly compounding

Input

5% interest rate, monthly, 10,000 for 1 year

Expected result

APY 5.1162%; balance 10,511.62; interest 511.62

Daily and continuous

Input

5% interest rate, daily / continuously

Expected result

APY 5.1267% / 5.1271%

APY back to APR

Input

5% APY, monthly compounding

Expected result

APR 4.8889%

Tips

  • Compare accounts by APY, not by the interest rate, because APY already includes compounding.
  • A higher APY on a smaller promotional balance may earn less than a slightly lower APY on your whole balance.
  • Variable rates change over time, so treat multi-year balances as estimates.

Frequently Asked Questions

What is APY?
Annual percentage yield is the effective yearly return including compound interest. It is always equal to or higher than the nominal rate when interest compounds more than once a year.
How do you calculate APY from APR?
APY = (1 + APR ÷ n)ⁿ − 1, where n is the number of compounding periods per year. A 5% rate compounded monthly gives (1 + 0.05 ÷ 12)¹² − 1 = 5.1162%.
What is the difference between APR and APY?
APR is the simple annual rate before compounding. APY includes the effect of earning interest on interest. Savings products are usually advertised by APY; loans are usually quoted by APR.
How do I convert APY to APR?
APR = n × ((1 + APY)^(1 ÷ n) − 1). A 5% APY with monthly compounding corresponds to an interest rate of about 4.8889%.
How much does compounding frequency matter?
Less than many people expect. At a 5% rate, annual compounding gives 5% APY, monthly gives 5.1162%, daily gives 5.1267% and continuous gives 5.1271%.
Does the calculator include deposits or taxes?
No. It assumes a single deposit, a fixed rate, no withdrawals and no tax on interest.

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Glossary

APY
Annual percentage yield: the effective annual return including compounding.
APR
Annual percentage rate: the nominal yearly rate before compounding.
Compounding frequency
How many times per year interest is added to the balance.
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