📊APY Calculator

About this tool

Enter a rate and choose how often it compounds to get the APY, or switch direction to find the nominal rate behind a quoted APY. Add a deposit and a number of years to see the interest earned, plus a table comparing the same rate under different compounding frequencies.

APR vs APY

The nominal interest rate, often called APR, is the yearly rate before compounding. APY (annual percentage yield), called AER (annual equivalent rate) in the UK, is what you actually earn over a year once interest is added and starts earning interest itself. The formula is APY = (1 + r ÷ n)ⁿ − 1, where r is the nominal rate and n the number of compounding periods per year. For continuous compounding, APY = eʳ − 1. The more often interest compounds, the higher the APY: 4.5% compounded yearly is 4.5%, monthly 4.5940%, daily 4.6025% and continuously 4.6028%. The difference is small for one year but grows on large balances and long periods. Banks must quote APY on savings accounts and CDs in the US, and AER in the UK, so comparing those figures directly is the fair way to choose an account. Converting back tells you the nominal rate a monthly-compounding account needs to match a competitor's APY. Loans work in the other direction: a credit card's 24% APR compounds monthly (or daily), so the effective cost is higher than the headline. Honest limits: tax on interest, account fees, introductory bonus rates and variable rates aren't included. The compound interest calculator, the APR calculator and the savings goal calculator are related, and Compound interest, explained with real numbers explains compounding.

Frequently asked questions