Skip to content
OverCalculator
  1. Home
  2. Financial
  3. APY Calculator
Financial

APY Calculator

Convert a nominal APR, compounding frequency, deposit, and term into annual percentage yield, final deposit value, and interest earned.

Published

Annual percentage yield
APY
5.12%
Final deposit
$11,614.72
Interest earned
$1,614.72
Nominal APR
5%

$10,000.00 at 5% compounded 12 times per year grows to $11,614.72 in 3 years.

The starting balance in the account or investment.
$
The nominal annual rate before compounding.
%
How long the deposit compounds.
yr

Results update as you type.

APY Calculator

Annual percentage yield turns a stated annual rate into the return a saver actually earns after compounding. That distinction is small at low rates and short terms, but it matters when comparing deposits that compound monthly, weekly, or daily. This calculator takes an initial deposit, a nominal annual rate labeled APR in the form, a compounding frequency, and a term. It returns APY, final deposit value, interest earned, and the nominal APR used in the calculation.

Use this page for savings accounts, certificates of deposit, money market accounts, and other balances where interest is credited back into the account. For a broader plan with repeated contributions, use the compound interest calculator. For a target-based savings plan, pair it with the savings goal calculator. If the same rate is attached to debt instead of deposits, compare the result with the APR calculator or finance charge calculator before making a borrowing decision.

How the calculator matches the stated inputs

The calculation reads four inputs: initial deposit, annual rate, compound frequency, and term in years. The rate is divided by 100 to become a decimal. The APY is calculated for one year using the selected number of compounding periods. The final deposit is calculated over the full term by raising the periodic growth factor to compounds per year times years. Interest earned is simply final deposit minus initial deposit.

The calculator accepts a zero deposit and a zero-year term. In those cases, APY still describes the annualized yield from the rate and compounding selection, while the final deposit may equal the starting deposit. Negative deposits, negative rates, negative terms, or nonpositive compounding frequencies are invalid because they do not match the intended savings-account model.

Formula

For periodic compounding, APY is:

APY=(1+nominal annual ratecompounds per year)compounds per year−1\text{APY} = \left(1 + \frac{\text{nominal annual rate}}{\text{compounds per year}}\right)^{\text{compounds per year}} - 1

The future value over the chosen term is:

final deposit=initial deposit×(1+nominal annual ratecompounds per year)compounds per year×years\text{final deposit} = \text{initial deposit} \times \left(1 + \frac{\text{nominal annual rate}}{\text{compounds per year}}\right)^{\text{compounds per year} \times \text{years}}

Interest earned is:

interest earned=final deposit−initial deposit\text{interest earned} = \text{final deposit} - \text{initial deposit}

Example

With the default inputs, the initial deposit is $10,000, the nominal APR is 5%, compounding is monthly, and the term is 3 years. Monthly compounding means there are 12 compounding periods per year, so the periodic rate is 5% ÷ 12, or about 0.4166667% per month.

The APY calculation is one year of those monthly periods: one plus the monthly rate, raised to the 12th power, minus one. The result is 5.12% when formatted by the calculator. The final deposit calculation uses 36 monthly periods because 12 compounds per year times 3 years equals 36. The result is $11,614.72. Interest earned is final deposit minus starting deposit, or $1,614.72. The output also repeats the nominal APR as 5.00%, making the before-compounding and after-compounding figures visible together.

This example shows why APY is not just a cosmetic label. A 5% nominal rate compounded annually would leave $10,000 at $11,576.25 after three years. Monthly compounding raises that to $11,614.72 because interest credited in earlier months participates in later months.

APY versus APR versus EAR

APY is the saver-facing measure. It answers, “What one-year yield does this account produce after compounding?” APR is typically the borrower-facing measure. It answers, “What yearly cost is associated with this credit offer, often including finance charges or fees?” EAR is the neutral effective annual rate. Mathematically, APY and EAR can use the same compounding formula, but APY is the term consumers usually see on deposit disclosures, while EAR is common in finance theory and loan comparisons.

That language matters because the same percentage can describe opposite cash flows. A 5.12% APY on savings is income to you before taxes and fees. A 5.12% effective borrowing rate is a cost. Use the EAR calculator if you want to focus on rate conversion alone, the APR calculator if fees affect a loan, and the amortization calculator if you need a principal-and-interest payoff schedule.

Tips before choosing an account

  • Compare APY over the same term. A promotional APY that drops after three months may not beat a slightly lower stable rate.
  • Check whether interest compounds daily but pays monthly; the APY can still reflect the compounding math, but access to funds may differ.
  • Review fees, minimum-balance rules, withdrawal limits, and early withdrawal penalties. The calculator does not subtract them.
  • Consider taxes. Interest earned in a taxable account can be worth less after federal, state, or local tax.
  • Do not ignore principal safety. APY describes yield, not credit risk, liquidity, or insurance coverage.

Displayed results use the currency, time period, percentage, or other units named in the tool and round only for presentation; retain additional precision when carrying a result into another calculation.

Sources

Frequently asked questions

What does APY mean?
APY means annual percentage yield. It expresses the one-year return after compounding is included, which makes savings accounts, certificates of deposit, money market accounts, and similar deposit products easier to compare fairly when they compound interest at different frequencies.
Why is APY usually higher than APR?
APR is the nominal annual rate before compounding. When interest compounds more than once per year, each credited interest amount starts earning its own interest. APY includes that interest-on-interest effect, so it is higher unless interest compounds only annually or the rate is zero.
Does the APY result include fees or taxes?
No. The calculator applies only the deposit, nominal annual rate, compounding frequency, and term. Account fees, early withdrawal penalties, federal or state taxes, changing rates, inflation, and minimum-balance rules can reduce the real return you keep after account costs.
Can APY be used to compare loans?
APY is mainly a yield measure for savers and investors. Borrowers usually compare APR, finance charges, payment schedules, or effective annual rates depending on the question. A loan advertised with APY language should be reviewed carefully against its borrowing disclosures.

Related calculators

Balance Transfer CalculatorCompare a credit card balance transfer against the old card after transfer fees, promotional APR, regular APR, and payments.Blended Rate CalculatorCalculate the weighted-average interest rate across multiple balances and estimate one-period interest from the combined balance.50/30/20 Rule CalculatorSplit monthly after-tax income into the classic 50/30/20 budget buckets for needs, wants, and savings or debt repayment, with a worked example and practical adjustment tips.Future Value of Annuity CalculatorProject the ending value of equal payments by growing each ordinary-annuity or annuity-due cash flow to the end of the schedule with the selected compounding frequency.Growing Annuity CalculatorCalculate the future value of a growing annuity with payment growth, return, frequency, timing, and an optional opening balance.Lottery Annuity CalculatorEstimate a lottery annuity's first payment, final payment, gross total, after-tax total, and present value from a growing payout schedule.

APY Calculator updated at