APY (Annual Percentage Yield) — what you earn on savings, including compounding. Higher is better.
APR (Annual Percentage Rate) — what you pay on loans and credit cards, excluding compounding. Lower is better.
Try it: APY Calculator
Compare APY vs APR on the same balance, term, and contribution to see the dollar impact of compounding.
APY Calculator
About the APY Calculator
This apy calculator is an apy savings calculator that shows how compound interest turns a simple interest rate into annual percentage yield. By entering your balance, nominal rate and compounding schedule, the apy calculator estimates your effective APY, interest earned and final savings or CD balance so you do not have to guess how to calculate apy by hand.
Interest rate vs APY
The apy calculator compares the stated interest rate with the effective APY once compounding is applied. This makes the apy savings calculator useful when you want to see how much more you earn with monthly or daily compounding instead of simple interest.
Compounding frequency
As an apy calculator savings tool, this page lets you test annual, quarterly, monthly, weekly and daily compounding. The formula the apy calculator uses matches typical bank disclosures for annual percentage yield.
Savings and CD examples
You can use this apy calculator as a quick cd calculator apy helper by entering a CD rate and matching compounding schedule, or as an apy calculator savings tool for regular high‑yield savings accounts.
What affects your APY results?
- Nominal rate: higher interest rates make the apy calculator show larger returns for the same compounding schedule.
- Compounding: more frequent compounding pushes the apy savings calculator result higher even when the stated rate stays the same.
- Time horizon: longer terms give compounding more time to work, so the apy calculator shows larger interest totals even though APY itself is quoted on a one‑year basis.
- Account type: the same apy calculator can be used for high‑yield savings accounts, money market accounts or CDs, as long as you enter the correct rate and compounding.
What does this apy calculator do?
This apy calculator converts a nominal interest rate into annual percentage yield based on your chosen compounding frequency. It then applies that APY to your balance and time horizon so you can see total interest and final savings, similar to other apy savings calculator and cd calculator apy tools.
How to calculate apy from interest rate?
To calculate APY from an interest rate, you take the rate in decimal form, divide by the number of compounding periods per year, add 1, raise to the power of the number of periods, and subtract 1. The formula this apy calculator uses is APY = (1 + r / n)^n − 1, where r is the nominal rate and n is the compounding frequency.
Can I use this apy calculator for CDs as well as savings?
Yes. While it is built as an apy calculator savings tool, you can treat it like a cd calculator apy helper by entering the CD rate, compounding schedule and term. The apy calculator will then show effective APY and total interest over the CD term.
What is the difference between APY and simple interest?
Simple interest ignores compounding and only multiplies balance by the nominal rate and time. The apy calculator, by contrast, includes the effect of compounding, so APY is usually higher than the simple interest rate for the same account.
Is this apy calculator the same as my bank's apy savings calculator?
This independent apy calculator is similar to many bank apy savings calculator pages, but it is not tied to any specific product. You can plug in rates from different banks, compare APY results and pick the savings or CD account that best fits your goals.
How our APY calculator works
Enter the nominal rate
Type the stated interest rate (APR) as a percentage. This is the rate the bank quotes before compounding.
Set compounding frequency
Choose daily, monthly, quarterly, or annual compounding. Most savings accounts compound daily; bonds usually compound semi-annually.
Get the APY
APY = (1 + r/n)^n - 1, where r is the nominal rate and n is the compounding periods per year. We show both the APY and the effective annual interest.
Key things to know about our apy calculator:
- APY vs APR: APR is the simple rate. APY is the actual yearly return after compounding. For a 5% APR compounded monthly, APY is 5.12%.
- FDIC accounts: APY is the standardized way to compare savings accounts and CDs. Always compare APY, not the nominal rate.
- Compounding edge: More frequent compounding (daily vs monthly) earns slightly more. For high balances, the difference is meaningful.
For related calculations, try our compound interest calculator.
The full calculator includes daily/monthly/yearly compounding modes and inflation-adjusted real return.
Open the full finance calculatorHow APY Works: Earning Interest on Interest
APY factors in how often interest compounds. If a bank offers 5% APY compounded monthly, you earn interest on your interest each month. Over a year, that 5% becomes slightly more than 5% effective yield.
APY = (1 + r/n)^n - 1
- r = Annual interest rate (decimal)
- n = Number of compounding periods per year
Example: 5% rate compounded monthly → APY = (1 + 0.05/12)^12 - 1 = 5.12%
How APR Works: The True Cost of Borrowing
APR includes the interest rate plus certain fees (origination fees, closing costs, etc.). It gives you a more complete picture of what a loan actually costs than the interest rate alone. However, unlike APY, APR does not account for compounding within the year.
APY — For Savers
Used for savings accounts, CDs, money market accounts.
Includes compounding effect.
Higher APY = More earnings
APR — For Borrowers
Used for mortgages, auto loans, credit cards.
Includes fees + interest rate.
Lower APR = Less cost
Why the Difference Matters
A savings account advertising 5.00% APY compounded daily actually earns you more than 5.00% — closer to 5.13%. But a credit card with 19.99% APR, when compounded daily, costs you an effective rate closer to 22%. The gap between stated rate and effective rate grows with compounding frequency.
Calculate It Yourself
Use our APY Calculator to compare savings accounts with different compounding frequencies, and our CD Calculator to see how certificate of deposit rates stack up.