APY Calculator

Enter the stated APR from a savings account, CD, or money market disclosure. APR is the nominal annual rate before compounding effects.

Choose how many times interest compounds each year. Monthly compounding uses 12; daily uses 365.

Compare APY across products. APY reflects the effective annual return after compounding and is useful for apples-to-apples comparisons.

Banks advertise both APR and APY because they measure slightly different things. APR describes the contractual nominal rate, while APY shows what you effectively earn or pay after interest is compounded on a schedule throughout the year.

Higher compounding frequency increases APY relative to the same APR, though the difference is often small for everyday savings rates. The gap becomes more noticeable when rates are high or balances remain untouched for long periods.

When shopping for CDs, confirm whether interest is credited back into the account or paid out periodically. Payout structures change how compounding works in practice even when the quoted rate looks similar on paper.

Use APY for deposit comparisons and APR for loan comparisons. Mixing the two without conversion can make one product look better than another even when the underlying economics are close.