Finance calculator

APY Calculator - Effective Annual Yield

Convert a nominal interest rate into APY, compare compounding choices, and estimate interest earned on a deposit.

FormulaAPY = (1 + nominal rate / compounds per year)^(compounds per year) - 1

Formula

APY formula

APY comparisons should also consider fees, insurance, minimum balances, withdrawal limits, and whether the rate can change.

APY = (1 + nominal rate / compounds per year)^(compounds per year) - 1

A 5% nominal rate compounded monthly gives APY = (1 + 0.05/12)^12 - 1.

SourcesThis calculator includes source notes, assumptions, and exclusions so the result is easier to verify before use.

Sources and assumptions

Source notes

This calculator includes source notes, assumptions, and exclusions so the result is easier to verify before use.

Effective year
Current rules
Last verified
2026-06-18

APY comparisons should also consider fees, insurance, minimum balances, withdrawal limits, and whether the rate can change.

Assumptions

  • The entered nominal annual rate is compounded at the selected frequency.
  • The projection assumes the deposit remains invested for the full term.
  • Fees, taxes, promotional conditions, and withdrawal rules are not included.

Not included

  • Bank fees, taxes, early withdrawal penalties, variable-rate changes, promotional tiers, and account-specific terms.
FAQ7 common questions for this calculator.

FAQs

What is APY?+

APY is the effective annual yield after compounding, so it can be higher than the nominal annual rate.

Why does compounding frequency matter?+

More frequent compounding credits interest sooner, which can slightly increase the effective annual yield.

Can I compare savings accounts with APY?+

Yes, but compare accounts with similar fees, access rules, insurance, minimums, and rate-change terms.

How does the APY Calculator calculate the result?+

For the APY Calculator, it uses the APY formula: APY = (1 + nominal rate / compounds per year)^(compounds per year) - 1. A 5% nominal rate compounded monthly gives APY = (1 + 0.05/12)^12 - 1.

What information do I need to use the APY Calculator?+

Enter the money values, rates, dates, quantities, or assumptions requested by the form. Keep every amount in the same currency or business period before comparing the APY Calculator result.

How accurate is the APY Calculator?+

APY Calculator is accurate for the rates, amounts, dates, and rules entered. It uses the APY formula shown on this page. Real products can differ because of fees, taxes, contract terms, or changing official thresholds.

What should I check before using the APY Calculator result?+

For the APY Calculator, check the entered amounts, rates, dates, and rules, then compare the APY formula and worked example with the contract or source you will rely on. Fees, tax year, currency, and payment timing can change the final decision.

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Finance guide

How to use the APY Calculator

Convert a nominal interest rate into APY, compare compounding choices, and estimate interest earned on a deposit. The page also explains the APY formula and shows a practical example: A 5% nominal rate compounded monthly gives APY = (1 + 0.05/12)^12 - 1.

  1. 1

    Enter your details

    Enter the values for the apy calculator scenario you want to check.

  2. 2

    Check the calculation

    Review the result alongside the APY formula: APY = (1 + nominal rate / compounds per year)^(compounds per year) - 1.

  3. 3

    Compare scenarios

    Change one or more inputs to see how they affect the APY Calculator result before you use the estimate.