APY Calculator
Convert a stated interest rate into annual percentage yield (APY), what you actually earn in a year.
About the APY Calculator
Enter the nominal interest rate and how often it compounds. The calculator gives the APY, the yearly rate you actually earn once interest earns interest.
APY includes the effect of compounding: interest earning interest within the year. Under the US Truth in Savings Act, banks must quote APY on deposit accounts, which makes accounts with different compounding easy to compare.
The formula
APY = (1 + r/n)ⁿ − 1
- r
- stated yearly rate as a decimal
- n
- compounding periods per year
- Continuous
- APY = eʳ − 1
Worked example
4.5% compounded monthly
- (1 + 0.045 ÷ 12)¹² − 1
- = 4.594% APY
- 0.094 points more than the stated rate
Questions people ask
Is APY the same as AER?
Yes; AER (annual equivalent rate) is the UK term.
APY vs APR?
APY is used for savings and includes compounding; APR is used for loans and usually doesn't.