Finance calculator

Free apy calculator

Convert APR to APY for any compounding frequency — enter annual percentage rate and compounding periods to see the true annual yield, updated live, as you type.

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InputsLive

Convert

Compounding

APR

Result

APY

5.1162%

Monthly compounding · APR 5%

APY5.1162%

APR5%

CompoundingMonthly

Periods/year12

APY = (1 + APR/n)^n − 1. Truth in Savings Act (TISA) requires APY disclosure for deposit accounts.

Results are estimates. Consult a professional.

How it's calculated

How the APY calculator works

Annual Percentage Yield (APY) is the real rate of return earned on savings or investments after accounting for the effect of compounding within a year. The more frequently interest is compounded, the higher the APY relative to the stated Annual Percentage Rate (APR). Banks are required by law to disclose APY so you can make accurate comparisons across accounts.

APY = (1 + APR / n)ⁿ − 1

where: APR = annual percentage rate (nominal rate) as a decimal

n = number of compounding periods per year

(daily = 365, monthly = 12, quarterly = 4, annually = 1)

APY definition and formula — Investopedia How banks calculate APY — FDIC Consumer Resource Center

Example

Worked example: 5% APR with daily compounding

Example: 5% APR nominal rate, compounded daily (n = 365)

A high-yield savings account advertises a 5% APR with daily compounding. What is the actual APY — the return you will really earn over a full year?

APY = (1 + 0.05 / 365)³⁶⁵ − 1

APY = (1.000136986)³⁶⁵ − 1

APY = 1.05127 − 1

APY = 0.05127 = 5.127%

5.127% APY

Daily compounding turns a 5% APR into a 5.127% APY — an extra $12.70 in interest per $10,000 per year compared to annual compounding.

Quick reference

APY by compounding frequency for common APR rates

The table shows the effective APY for APRs of 4%, 5%, and 6% compounded annually, quarterly, monthly, and daily. More frequent compounding always yields a higher effective rate.

APR	Annual (n=1)	Quarterly (n=4)	Monthly (n=12)	Daily (n=365)
4%	4.000%	4.060%	4.074%	4.081%
5%	5.000%	5.095%	5.116%	5.127%
6%	6.000%	6.136%	6.168%	6.184%

Source: APY = (1 + APR/n)ⁿ − 1; percentages rounded to three decimal places.

Practical tips

Tips for comparing APY across accounts

APY is the fairest basis for comparing savings accounts, CDs, and money-market funds. Here are five tips to make sure you're reading it correctly.

Always compare APY, not APR — two accounts with the same APR but different compounding schedules will deliver different returns; APY normalises the comparison.
Check whether the rate is promotional — introductory APYs often apply only for a short term; confirm the ongoing rate and when it resets.
Factor in fees before selecting an account — monthly maintenance fees can easily erase the advantage of a higher APY; calculate net yield after all charges.
For CDs, verify the compounding frequency in the disclosure — daily-compounding CDs will outperform monthly-compounding CDs at the same stated APR over the full term.
Use APY to evaluate bonds and dividend yields too — converting a bond's coupon to an effective annual rate allows side-by-side comparison with savings account APYs.

Accuracy & limits

Accuracy and limitations

This calculator uses the standard Regulation DD formula and assumes the stated APR and compounding frequency remain constant for a full year. In practice, variable-rate accounts can adjust APR daily; early withdrawal from CDs forfeits some interest; and tax on interest income reduces the after-tax yield. The APY shown is a gross pre-tax figure.

When comparing high-yield savings accounts, money-market funds, and CDs side by side, always use APY as the common denominator — it is the only number that fully accounts for how each institution compounds interest.

Not financial advice — consult a financial professional for your specific situation.

Glossary

Key terms

The nominal yearly interest rate stated by the lender or bank before compounding is applied — also called the 'stated rate'.

The effective annual rate after compounding within the year; always ≥ APR and increases with compounding frequency.

How often interest is calculated and added to the balance each year — daily (365), monthly (12), quarterly (4), or annually (1).

The mathematical limit as n → ∞; APY = e^APR − 1. Rarely used in practice but common in finance textbooks.

Another name for APY — the actual annual return after all intra-year compounding, expressed as a percentage.

U.S. Federal Reserve rule requiring depository institutions to disclose APY on savings and deposit products so consumers can compare accurately.

An elevated introductory rate offered for a limited period (often 3–12 months) after which the account reverts to a standard, lower APY.

About

About this calculator

Part of our finance calculators suite — explore all calculators.

Questions

Frequently asked questions about the free apy calculator

An APY calculator is a free online tool that helps you convert APR to APY given compounding frequency. APY captures the effect of compounding within the year. It runs entirely in your browser with instant results and no sign-up.

No — actual loan terms depend on credit, income docs, and lender underwriting. Use this for planning and what-if scenarios; get a real Loan Estimate before making decisions.

When the calculator asks for them. PITI calculations include property tax, insurance, and PMI; raw P&I calculations don't.

Lenders round payment amounts and may include escrow buffers. Property tax and insurance change over time. Real payments vary 1-5% from these estimates.