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APY Calculator

Calculate annual percentage yield from an interest rate and compounding frequency to compare savings and investment returns more easily.

Your Details

Overview

Use this APY Calculator to convert a stated annual interest rate into annual percentage yield and see how compounding affects your balance over time. Enter your starting balance, nominal rate, compounding frequency, and term to compare savings accounts, CDs, or similar interest-bearing products.

How it works

APY shows the effective annual return after compounding is taken into account. The calculator converts the nominal annual rate into a decimal, applies the selected compounding frequency, and calculates APY using the standard formula APY = (1 + r/n)^n - 1. It also projects the ending balance over your chosen term using compound interest, assuming the rate stays the same and no extra transactions occur.

How to use this calculator

  1. 1Enter your starting balance.
  2. 2Add the nominal annual interest rate.
  3. 3Choose the compounding frequency.
  4. 4Enter the number of years.
  5. 5Review the APY, ending balance, and total interest earned.

Example Calculation

Starting Balance

$10,000

Nominal Interest Rate

5%

Compounding Frequency

12

Term

3

APY

5.12% APY

With a starting balance of 10000 at 5% nominal interest compounded monthly for 3 years, the APY is about 5.12%, the ending balance is about 11614.72, and interest earned is about 1614.72.

Frequently asked questions

What does this APY Calculator estimate?

It estimates the annual percentage yield from a stated annual interest rate and compounding frequency, and it can also project ending balance and interest earned over time.

What is the difference between APR and APY?

APR is the stated annual rate before compounding, while APY reflects the effective annual return after compounding is included.

Why does compounding frequency matter?

The more often interest compounds, the higher the effective annual yield will be for the same nominal rate.

Can I use this calculator for savings accounts and CDs?

Yes, it is useful for comparing products that pay interest based on a stated annual rate and a known compounding schedule.

Does this calculator include deposits, withdrawals, fees, or taxes?

No. It assumes a fixed starting balance with no additional transactions, fees, or tax effects.

Is a higher APY always better?

A higher APY generally means a better effective return, but you should also consider fees, access restrictions, minimum balance rules, and rate changes.

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Assumptions and warnings

Assumptions

  • The stated interest rate remains constant for the entire term.
  • Interest is compounded at the frequency you selected.
  • No additional deposits, withdrawals, fees, or taxes are included.
  • Results are estimates and may differ from actual account terms or provider calculations.

Warnings

  • This calculator provides an estimate only and is not financial advice.
  • Actual returns may differ due to fees, changing rates, taxes, or account-specific rules.