APY Calculator

Annual percentage yield (APY) is the honest way to compare savings accounts, CDs, and money market accounts, because it folds compounding into a single annual rate. Two accounts can advertise the same nominal interest rate yet pay different amounts if one compounds daily and the other annually: APY exposes that difference.

Curious how compounding frequency changes a balance over time, not just the rate? Our compound interest calculator shows the full year-by-year growth behind the yield.

This calculator converts a stated rate into its APY at any compounding frequency and grows your deposit accordingly, so you can compare accounts quoted in different ways on equal footing.

How does this calculator work?

Enter an interest rate, choose a compounding frequency, set how long the money stays deposited (in months), and your initial contribution. The calculator finds the annual percentage yield (APY) and grows your deposit at that yield.

APY is what you actually earn once compounding is included: APY = (1 + rate ÷ n)^n − 1, where n is the number of compounding periods per year. For the same stated rate, more frequent compounding yields a higher APY.

The data table grows your initial contribution year by year at all five compounding frequencies (annually, quarterly, monthly, weekly, and daily), with the APY for each shown beneath, so you can compare accounts quoted different ways.

Worked example

Take a 5% nominal rate and see how the APY changes with compounding frequency on a $10,000 deposit.

Nominal rate

5.00%

Compounded annually

5.000% APY

Compounded quarterly

5.095% APY

Compounded monthly

5.116% APY

Compounded daily

5.127% APY

How the numbers work

Each APY is the nominal 5% run through the formula (1 + 0.05 ÷ n)^n − 1, where n is the number of compounding periods a year.

Annually (n = 1) it stays 5.000%; quarterly (n = 4) it rises to 5.095%; monthly (n = 12) to 5.116%; daily (n = 365) to 5.127%.

On a $10,000 balance the daily figure earns $512.67 in a year versus $500.00 with annual compounding, the entire effect of compounding frequency captured in one number.

The same 5% rate becomes anywhere from 5.00% to 5.13% APY depending only on how often it compounds. On $10,000 over a year that's the difference between $500.00 and $512.67: small, but it's why APY, not the nominal rate, is the figure to compare.

Gains from more frequent compounding shrink as you go: the jump from annual to monthly is far larger than from daily to continuous, which is why most banks compound daily and stop there.

APY vs. APR: don't confuse them

APY and APR look similar but answer opposite questions. APY describes what you earn on savings and includes compounding, so it's quoted at or above the nominal rate. APR describes what you pay on a loan and excludes compounding (though it includes fees), so a loan's true cost can be a bit higher than its APR. When you're saving, you want the highest APY; when you're borrowing, you want the lowest APR.