APY Calculator
Calculate annual percentage yield and see how a deposit grows, plus compare yields across compounding frequencies
Last updated: 2026-07-20
Annual Percentage Yield (APY) is the effective annual rate a savings account, money market account, or CD actually pays once compounding is factored in -- it's always equal to or higher than the account's stated nominal rate for the same period. Banks are required to disclose APY (not just a nominal rate) so depositors can compare accounts on equal footing, since two accounts with the same nominal rate but different compounding schedules (monthly vs. daily, for example) don't pay the same amount. This calculator computes the APY for a deposit at a given rate and compounding frequency, shows the resulting ending balance, and compares what the same rate would yield under every standard compounding schedule side by side.
APY Formula
O(1)r = nominal annual interest rate, n = number of compounding periods per year
Ending balance A after t years, starting from principal P
The more often interest compounds within the year, the higher the resulting APY for the same nominal rate r -- daily compounding yields slightly more than monthly, which yields more than quarterly, and so on, up to the theoretical limit of continuous compounding (APY = e^r − 1). The gap between compounding frequencies is usually small (a few hundredths of a percent) but grows with the size of the rate. Regulators require APY to be calculated this way under Truth in Savings (Regulation DD) so that accounts with different compounding schedules can be compared on a single number rather than a nominal rate that hides the compounding effect.
Use Cases
Comparing Savings and Money Market Accounts
See the actual APY and ending balance for a stated rate and compounding schedule, rather than relying on the bank's advertised figure alone.
Shopping for the Best Compounding Schedule
Compare the same nominal rate across annual, monthly, daily, and continuous compounding to see how much of a difference the schedule actually makes.
Projecting Multi-Year Savings Growth
Estimate how a lump-sum deposit will grow over several years at a fixed APY, useful for CDs, high-yield savings, and other fixed-rate deposit accounts.
Verifying Advertised Rates
Check that a bank's advertised APY is consistent with its stated nominal rate and compounding frequency, per Regulation DD's disclosure formula.
Frequently Asked Questions
What's the difference between APY and the interest rate?
The interest rate (or nominal rate) is the simple annual rate before compounding; APY is the effective rate you actually earn once interest-on-interest is factored in. APY is always equal to or greater than the nominal rate for a positive rate.
Does compounding frequency matter much in practice?
For typical savings rates the difference between monthly and daily compounding is usually a few hundredths of a percent -- small, but it grows as the nominal rate itself increases, which is why the comparison table shows all the standard schedules side by side.
Why is my ending balance slightly different from a simple-interest estimate?
Simple interest (rate × principal × years) ignores compounding entirely. APY-based growth reinvests each period's interest, so the ending balance is always at least as large as the simple-interest estimate, and higher whenever compounding happens more than once a year.
What does "continuous compounding" mean?
It's the mathematical limit of compounding infinitely often (every instant), used mainly as a theoretical upper bound -- very few real deposit accounts actually compound continuously, though daily compounding gets close to it.
How is this different from the APR to APY calculator?
The APR to APY calculator is a pure rate conversion tool. This calculator adds a deposit amount and time period so you can see the actual dollar growth, plus a side-by-side comparison across compounding frequencies.
References
Ad Space (AdSense)