APY Calculator

Finance

The APY Calculator finds the annual percentage yield — the real return on savings once compounding is included. Enter the nominal annual rate and how often it compounds. The formula used is: APY = [(1 + r/n)ⁿ - 1] × 100.

Formula

APY = [(1 + r/n)ⁿ - 1] × 100
  • The APY Calculator updates instantly as you change the annual rate or compounding frequency.
  • Formula: APY = [(1 + r/n)ⁿ - 1] × 100
  • Input definitions: • Annual Rate %: the nominal yearly interest rate (enter 5 for 5%) • Compounds per Year: how many times interest is added per year
  • APY captures compounding, so more frequent compounding raises the yield above the nominal rate.
  • Common frequencies: 12 for monthly, 4 for quarterly, 365 for daily.
  • Use APY to compare savings accounts and deposits on an equal, compounding-aware basis.

Example Calculation

Inputs
  • Annual Rate %: 5
  • Compounds per Year: 12

A 5% nominal rate compounded monthly gives APY = [(1 + 0.05/12)^12 − 1] × 100 ≈ 5.12%.

Frequently asked questions

What is APY?
Annual percentage yield is the effective yearly return on savings once compounding is taken into account.
How does APY differ from the nominal rate?
The nominal rate ignores compounding. APY includes it, so it is equal to or higher than the nominal rate.
How does compounding frequency affect APY?
More frequent compounding (e.g. daily vs annually) produces a slightly higher APY for the same nominal rate.
How do I enter the rate?
Enter the nominal annual rate as a plain percentage — type 5 for 5%.
Is APY the same as APR?
No. APR is the simple annualized rate without compounding, while APY includes compounding.