APY Calculator
Calculate Annual Percentage Yield and compare compounding frequencies.
100% Client-Side
APY
5.116%
Final Amount
$10,511.62
Interest Earned
+$511.62
Frequency Comparison
Daily5.127%+$512.67
Monthly5.116%+$511.62
Quarterly5.095%+$509.45
Annually5.000%+$500.00
What is APY Calculator?
An APY (Annual Percentage Yield) calculator determines the real rate of return on a savings account or investment when compounding is factored in. Unlike APR, APY reflects the actual earnings including the effect of interest compounding on itself throughout the year.
How to Use
- Enter the stated annual interest rate (APR)
- Select the compounding frequency (daily, monthly, quarterly, etc.)
- View the calculated APY and the effective earnings difference
- Compare APY across different accounts or compounding periods
Formula
APY = (1 + r/n)^n - 1, where r = annual rate, n = compounding periods per year
Frequently Asked Questions
- What is the difference between APR and APY?
- APR is the stated annual rate without compounding. APY includes the effect of compounding, making it slightly higher. APY gives a more accurate picture of actual earnings.
- Does higher compounding frequency always mean more money?
- Yes, more frequent compounding earns slightly more. A 5% rate compounded daily yields 5.127% APY, while monthly compounding yields 5.116%. The difference is small but real.
- Why do banks advertise APY for savings but APR for loans?
- Banks highlight whichever number looks more favorable. Higher APY makes savings attractive, while lower APR makes loans appear cheaper. Always compare like with like.