APY Calculator — Annual Percentage Yield Calculator
Calculate APY from any interest rate and compounding schedule, project what your savings really earn, and convert a bank’s advertised APY back into its true interest rate — free, instant, no sign-up.
APY Calculator
Enter your interest rate and compounding frequency above — your APY, periodic rate and projected balance appear here instantly.
This apy interest calculator converts a nominal interest rate into the true annual percentage yield with the standard formula APY = (1 + r/n)n − 1. It is an estimate for planning and comparison, not a bank offer.
How to Use This APY Calculator
- Pick your tab. Use the first tab to calculate APY from an interest rate, the savings tab to project a balance from a quoted APY, or the converter tab to work backwards from APY to the nominal interest rate.
- Enter the rate and the compounding frequency. The rate is the nominal interest rate the bank quotes before compounding. Daily compounding means n = 365, monthly means n = 12, quarterly means n = 4.
- Add a deposit and a term if you want dollars, not just a percentage. Both fields are optional in the first tab — the APY itself never depends on how much you deposit.
- Read the APY, the periodic rate and the formula line. The result shows every step of the apy formula with your own numbers substituted, plus a table that shows what the same rate pays at every other compounding frequency.
- Tap an example chip to test a known case. The 5% monthly example must return 5.116% APY — use it any time you want to check the tool against a bank statement.
Why Use This APY Calculator?
- It compares accounts fairly. Two banks can quote the same 4% interest rate and pay different amounts because one compounds daily and the other monthly. APY strips that difference away — it is the one number the Truth in Savings Act forces every bank to disclose in the same format.
- Your interest earns interest. Compounding means each interest payment joins your balance and earns the next payment. The longer the money sits and the more often it compounds, the wider the gap between the nominal rate and the annual percentage yield grows.
- Every contribution counts. The savings tab adds a monthly deposit to the projection, so you see what steady saving does next to a headline rate — on the $10,000 example below, $200 a month adds more to the final balance than the interest does.
- It runs both directions. Most bank tools only convert a rate into an APY. This one also converts an advertised APY back into the underlying interest rate, which is how you check a SoFi APY headline, an Axos ONE promo rate or any other offer against the fine print.
- It shows the numbers banks leave out. Optional tax and inflation fields reveal your after-tax interest and your real APY — the return in buying power, which is the return that actually matters.
- Growth and security sit together. Balances at FDIC-insured banks are protected up to $250,000 per depositor, per bank, and NCUA insurance does the same job at credit unions — a high APY never has to mean an uninsured account.
Who Is This APY Calculator For?
- High-yield savings shoppers comparing a high-yield savings account at one online bank against another, where a 0.10% APY gap on $25,000 is $25 a year, every year.
- CD buyers who hold a certificate of deposit quote as a nominal rate and need the true yield before they lock money away for 6 months to 5 years.
- Money market account holders checking whether a money market account with check-writing access pays enough to justify its minimum balance.
- First-time savers asking what does APY stand for and why the bank advertises two different percentages for the same account.
- Loan borrowers cross-checking APR. The same compounding math that lifts a deposit’s APY above its rate also lifts a loan’s effective cost above its APR — the 12% example in the tool shows the gap at 12.683%.
- Anyone verifying a statement. If your statement shows an APY and a rate that do not match the formula, the converter tab finds the error in seconds.
What Is APY? What Does APY Stand For?
APY stands for annual percentage yield. The APY is the effective annual return on a deposit account, expressed as a percentage, after you count compound interest — the interest your interest earns. Savers also meet the same concept under its finance name, the effective annual rate (EAR). When a bank says an account pays 4.00% APY, it promises that $10,000 left untouched for a full year grows by exactly $400, whatever interest rate and compounding schedule sit underneath.
The annual percentage yield exists because a nominal interest rate alone cannot describe an account honestly. A 5% rate compounded monthly pays more than a 5% rate compounded once a year, because monthly interest starts earning its own interest eleven months earlier. Federal law solves the problem: the Truth in Savings Act and its Regulation DD (12 CFR Part 1030, enforced by the CFPB) require every bank to disclose the APY alongside the interest rate, calculated the same standard way, assuming the principal and interest stay in the account for a full 365-day term with no deposits or withdrawals. That single rule turns APY into the only apples-to-apples number in deposit shopping.
You meet APY on savings accounts, high-yield savings accounts, money market accounts, interest checking accounts and certificates of deposit. You never meet it on a loan — loans quote APR, the annual percentage rate, which measures cost instead of earnings and follows a different law, the Truth in Lending Act and Regulation Z.
How to Calculate APY — The APY Formula
The apy formula that every US bank uses takes one line:
APY = (1 + r/n)n − 1
r is the nominal annual interest rate as a decimal (5% becomes 0.05). n is the number of compounding periods in a year — 365 for daily, 52 for weekly, 12 for monthly, 4 for quarterly, 2 for semi-annual and 1 for annual compounding. For continuous compounding the formula becomes APY = er − 1.
Worked example: how to calculate APY on a 5% rate compounded monthly
- Convert the rate to a decimal: 5% ÷ 100 = 0.05.
- Divide by the number of periods: 0.05 ÷ 12 = 0.0041667. That 0.41667% figure is the periodic rate — the interest one month actually pays.
- Add 1 and raise to the power of n: 1.004166712 = 1.051162.
- Subtract 1 and convert back to a percentage: 0.051162 = 5.116% APY.
So $1,000 in that account earns $51.16 in a year and ends at $1,051.16 — not the $50 a simple 5% suggests. The extra $1.16 is compound interest: small on $1,000, worth $580 over 5 years on $10,000. When you calculate apy by hand for a CD where you know the interest instead of the rate, Regulation DD gives a second form of the same formula: APY = 100 × [(1 + Interest ÷ Principal)365 ÷ Days in term − 1]. A $10,000 CD that pays $400 over 365 days therefore yields exactly 4.00% APY.
How to calculate APY in Excel and Google Sheets
Spreadsheets carry the same math as a built-in function: =EFFECT(nominal_rate, n) returns the APY as a decimal. =EFFECT(0.05, 12) returns 0.0512, the same 5.116% APY. The reverse function, =NOMINAL(apy, n), converts an APY back into the nominal rate — exactly what the converter tab above does without a spreadsheet.
How to Calculate APY Per Month
The most common APY mistake on the internet is dividing by 12. APY divided by 12 overstates your monthly interest, because it pretends each month earns a simple slice of the year and ignores that later months earn interest on a bigger balance. The correct conversion takes the twelfth root:
Monthly rate = (1 + APY)1/12 − 1
For a 4% APY: (1.04)1/12 − 1 = 0.3274% per month — not 0.3333%. On a $10,000 balance that is $32.74 of interest in the first month, and the amount creeps up each month as the balance grows, reaching exactly $400 across the full year. The daily version works the same way with a 365th root: (1.04)1/365 − 1 = 0.01075% a day, or about $1.07 a day on $10,000.
| Balance at 4% APY | Interest in one month | Interest in one year |
|---|---|---|
| $1,000 | $3.27 | $40.00 |
| $5,000 | $16.37 | $200.00 |
| $10,000 | $32.74 | $400.00 |
| $25,000 | $81.84 | $1,000.00 |
| $50,000 | $163.69 | $2,000.00 |
| $100,000 | $327.37 | $4,000.00 |
Banks usually compound interest daily and credit it monthly, so the interest lands in your account once a month even though it builds every day. APY itself is always a yearly figure — a bank that advertises a monthly APY is advertising something else, usually the monthly periodic rate.
4% APY Calculator — What 4% APY Earns on Your Money
Four percent has become the benchmark rate on competitive high-yield savings accounts, so a 4 apy calculator search usually means one question: what does 4% APY pay on my balance? Because APY already includes compounding, the answer needs no frequency and no formula — balance times 1.04 for each year. Here is the full table:
| Deposit | After 1 year | After 3 years | After 5 years | Interest after 5 years |
|---|---|---|---|---|
| $1,000 | $1,040.00 | $1,124.86 | $1,216.65 | $216.65 |
| $5,000 | $5,200.00 | $5,624.32 | $6,083.26 | $1,083.26 |
| $10,000 | $10,400.00 | $11,248.64 | $12,166.53 | $2,166.53 |
| $25,000 | $26,000.00 | $28,121.60 | $30,416.32 | $5,416.32 |
| $50,000 | $52,000.00 | $56,243.20 | $60,832.65 | $10,832.65 |
| $100,000 | $104,000.00 | $112,486.40 | $121,665.29 | $21,665.29 |
Add a monthly deposit and the picture changes completely. The savings tab example — $10,000 plus $200 a month at 4% APY for 5 years — ends at $25,402.33: $22,000 of your own deposits and $3,402.33 of interest. Run your own balance and deposit in the apy calculator savings tab above to get your exact version of this table.
APY vs APR vs Interest Rate — What Is the Difference?
| Interest Rate | APY | APR | |
|---|---|---|---|
| What it measures | The raw nominal rate, before compounding | What a deposit actually earns in a year | What a loan actually costs in a year |
| Used on | Deposit and loan quotes | Savings accounts, money market accounts, CDs | Mortgages, car loans, credit cards, personal loans |
| Includes compounding? | No | Yes | No — it spreads fees over the term instead |
| Includes fees? | No | No | Yes — origination and lender fees |
| Governed by | Account agreement | Truth in Savings Act, Regulation DD | Truth in Lending Act, Regulation Z |
| Example | 5.00% compounded monthly | 5.116% APY | 12% APR compounded monthly costs 12.683% effectively |
The pattern to remember: banks advertise the highest honest number when you save (APY) and the lowest honest number when you borrow (APR). An apy interest calculator and an APR calculator answer opposite questions, and confusing them costs money in both directions. APY always equals or exceeds the nominal interest rate on the same account, and the two match only when interest compounds exactly once a year.
APY by Compounding Frequency — Why Frequency Matters
Hold the interest rate fixed and change only how often interest compounds, and the APY moves every time. The table below runs the same two rates through every frequency this tool supports — the tool itself prints a live version of this table for any rate you enter:
| Compounding | Periods a year (n) | APY on a 4% rate | APY on a 5% rate |
|---|---|---|---|
| Annually | 1 | 4.000% | 5.000% |
| Semi-annually | 2 | 4.040% | 5.062% |
| Quarterly | 4 | 4.060% | 5.095% |
| Monthly | 12 | 4.074% | 5.116% |
| Weekly | 52 | 4.079% | 5.125% |
| Daily | 365 | 4.081% | 5.127% |
| Continuously | Unlimited | 4.081% | 5.127% |
Two lessons hide in those rows. First, frequency matters most at high rates and barely at low ones — at a 0.40% rate, daily versus annual compounding changes the APY by less than a hundredth of a percent. Second, the gains flatten fast: monthly compounding captures almost all of the benefit, and daily adds only a few extra dollars per $10,000. Chase the APY first and the frequency second.
What Is a Good APY for a Savings Account?
A good APY is one that beats the national average by a wide margin, because the average account pays almost nothing. In October 2026 the FDIC national average savings rate sits near 0.38% APY, while competitive online high-yield savings accounts pay roughly 3.10% to 4.34% APY, top 12-month CDs pay about 4.00% to 4.35% APY, and headline offers reach 5.00% APY only with conditions attached. As a working rule: under 1% APY is poor, 3% to 4% APY is competitive, and anything above 4% APY on an insured, no-fee account is excellent.
Read headline rates like a contract, not an advertisement. A widely promoted sofi apy of 4.20%, for example, requires eligible direct deposits or a paid membership, and the rate without them is far lower; a 5.00% APY bank promo may apply for six months, to new customers only, or up to a capped balance. Savings APYs are also variable — they move with the Federal Reserve’s federal funds rate — while a CD locks its APY for the full term. The rate you calculate today is the rate the account pays today, and the savings tab above helps you test what a rate cut would do to your plan.
APY on Savings Accounts, CDs and Money Market Accounts
High-yield savings accounts
Online banks run a high-yield savings account at ten times the national average APY because they carry no branch network to fund. The APY is variable, withdrawals are usually limited, and interest typically compounds daily and credits monthly. This is the account the savings tab models best.
Certificates of deposit (CDs)
A CD trades flexibility for certainty: you lock a fixed APY for a set term and pay an early-withdrawal penalty, often several months of interest, if you break it. Banks quote CDs by APY, and the Regulation DD version of the formula on this page converts a CD’s stated interest back into that APY so you can verify the quote.
Money market accounts
A money market account blends savings yield with checking convenience — debit card, checks, and a higher minimum balance. Its APY is variable like a savings account’s, and many banks pay tiered APYs, where larger balances earn a different rate than smaller ones. When an account pays tiers, run this calculator once per tier with that tier’s rate.
Taxes, Inflation and Your Real APY
An APY is a pre-tax, pre-inflation number, and both corrections shrink it. Interest on savings accounts, money market accounts and CDs counts as ordinary income in the year the bank credits it — the bank reports it on Form 1099-INT — so a saver in the 22% federal bracket keeps only 78 cents of every interest dollar. Inflation cuts deeper and quieter: at 4% APY with 3% inflation, your real APY is (1.04 ÷ 1.03) − 1 = 0.97%. Your balance grows 4% while your buying power grows under 1%. The savings tab runs both corrections for you: add a tax rate and an inflation rate and it reports after-tax interest and real APY next to the headline figures. An account whose APY sits below inflation loses buying power every year it holds your money, however healthy the dollar balance looks.
Tips to Compare Accounts and Get the Best APY
- Compare APY to APY, never APY to interest rate. A 4.07% interest rate compounded monthly and a 4.00% APY are nearly the same account wearing different labels — run both through this tool before you move money.
- Check the conditions behind a headline APY. Direct-deposit requirements, minimum balances, balance caps, new-customer windows and promo periods decide what you actually earn. The advertised sofi apy and similar big-bank headlines all carry at least one.
- Watch the fees. APY excludes account fees by law. A monthly fee of $5 wipes out the full year’s interest on a $1,500 balance at 4% APY.
- Respect the term on CDs. A slightly higher CD APY that locks your emergency fund for 5 years loses to a liquid high-yield savings account the first time a real emergency charges you an early-withdrawal penalty.
- Re-check after every Fed move. Variable APYs follow the federal funds rate down as faithfully as they followed it up. A five-minute check with this calculator each quarter keeps your money in a competitive account.
- Keep balances insured. Stay under the $250,000 FDIC or NCUA limit per depositor, per institution, and a bank failure becomes an inconvenience instead of a loss.
Frequently Asked Questions
What does APY stand for?
APY stands for annual percentage yield. It is the effective annual return on a savings account, money market account or CD after compound interest is counted, standardised by the Truth in Savings Act (Regulation DD) so every bank discloses it the same way. A 4.00% APY means $10,000 left for a full year earns exactly $400.
How do I calculate my APY? What is the APY formula?
Use APY = (1 + r/n)^n – 1, where r is the nominal interest rate as a decimal and n is the number of compounding periods per year (365 daily, 12 monthly, 4 quarterly, 1 annually). A 5% rate compounded monthly gives (1 + 0.05/12)^12 – 1 = 5.116% APY. The calculator at the top of this page runs the formula instantly, in Excel the same result comes from =EFFECT(0.05, 12).
How to calculate APY per month?
Do not simply divide the APY by 12. Convert it with the twelfth root: monthly rate = (1 + APY)^(1/12) – 1. A 4% APY becomes 0.3274% per month, so $10,000 earns $32.74 in the first month, rising slightly each month until the full year totals exactly $400.
What is the difference between APY and APR?
APY measures what a deposit earns and includes compound interest; APR measures what a loan costs and includes lender fees instead of compounding. APY appears on savings accounts and CDs under Regulation DD, APR appears on mortgages, car loans and credit cards under Regulation Z. A 12% APR loan compounded monthly effectively costs 12.683%, the mirror image of a 12.683% APY on a deposit.
What is the difference between APY and the interest rate?
The interest rate is the raw nominal rate before compounding; APY is that rate after a full year of compounding. They are equal only when interest compounds once a year. A 5% interest rate compounded monthly is a 5.116% APY, and compounded daily it is a 5.127% APY.
What is 4% APY on $10,000?
Exactly $400 of interest in one year, for an ending balance of $10,400. Left untouched, the same $10,000 at 4% APY grows to $11,248.64 in 3 years and $12,166.53 in 5 years. With a $200 monthly deposit added it reaches $25,402.33 in 5 years.
What is a good APY for a savings account right now?
In October 2026 the FDIC national average savings rate is near 0.38% APY, competitive high-yield savings accounts pay about 3.10% to 4.34% APY, and top CDs pay about 4.00% to 4.35% APY. Treat under 1% as poor, 3% to 4% as competitive, and over 4% on an insured, no-fee account as excellent – and check headline rates for conditions such as required direct deposits or balance caps.
Is APY compounded daily, monthly or yearly?
APY itself is always a yearly figure. The compounding underneath it can be daily, monthly, quarterly or any other schedule the bank chooses; most US savings accounts compound daily and credit the interest monthly. More frequent compounding produces a slightly higher APY from the same interest rate.
What is 5% APY on $1,000?
A true 5% APY pays exactly $50 on $1,000 in one year, ending at $1,050. Do not confuse it with a 5% interest rate compounded monthly, which is a 5.116% APY and pays $51.16. Bank advertisements mix the two, which is exactly why this calculator separates them into different tabs.
Is APY taxable, and does APY include fees?
Yes, interest is taxable as ordinary income in the year it is credited, and the bank reports it on Form 1099-INT; APY is a pre-tax figure. APY also excludes account fees by law, so a monthly fee can quietly erase the yield on a small balance even when the APY looks competitive.
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Disclaimer: This calculator provides planning estimates only. It is not a bank offer, deposit quote or financial advice. APYs on savings and money market accounts are variable and change with market rates; CD APYs are fixed for the term. Rates, conditions and insurance limits change over time — confirm the current APY, interest rate and terms with the bank or credit union before you open an account.