APY Calculator
Convert between a stated rate (APR) and the effective yearly yield (APY), then see what a deposit would earn at that yield.
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APY Calculator by TheCalcTools
How the APY Calculator works
Choose the direction you need, enter the rate and how often it compounds. APR is the stated yearly rate without compounding. APY is the rate you actually earn in a year once interest is added to the balance and earns interest itself.
The calculator converts one to the other, and then applies the APY to your deposit for the time you choose. Use it to compare savings accounts and CDs that quote their rates differently.
The formula
Worked example
An account quotes 4.8% APR compounded monthly. A $10,000 deposit is left for 5 years:
| Convert | APR to APY |
|---|---|
| Rate | 4.8%, compounded monthly |
| Deposit | $10,000 for 5 years |
- APY = (1 + 0.048 ÷ 12)12 − 1.
- That gives an APY of 4.91%, a little above the stated 4.8%.
- Balance = 10,000 × (1 + APY)5 = $12,706.41.
- Interest earned = $2,706.41.
Result:
| APY (effective yearly yield) | 4.91% |
|---|---|
| APR (stated rate) | 4.80% |
| Balance after the time | $12,706.41 |
| Interest earned | $2,706.41 |
Frequently asked questions
What is the difference between APR and APY?
APR is the stated yearly rate, ignoring compounding within the year. APY includes compounding, so it shows what you actually earn over a year. For the same account, APY is equal to or higher than APR.
Why is APY higher than APR?
Because interest is added to your balance during the year and then earns interest too. The more often it compounds, the bigger the gap, though the effect is small at ordinary savings rates.
Which should I compare when choosing a savings account?
APY. In the US, banks must disclose APY on deposit accounts, which makes accounts with different compounding easy to compare.
Does this account for taxes or rate changes?
No. Interest is usually taxable, and variable rates change. This assumes a constant rate for the whole period.
What if I also add money each month?
Use the compound interest calculator, which includes regular deposits.
Sources and further reading
- Consumer Financial Protection Bureau: Regulation DD (Truth in Savings)
- Wikipedia: Annual percentage yield
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.