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Savings Growth Tool

Free APY Calculator

Calculate annual percentage yield, compare compounding frequencies, and estimate how your savings can grow over time.

  • Instant APY result
  • Multiple currencies
  • Savings projection
  • Year-by-year breakdown

Calculate Your APY

Enter the nominal interest rate and compounding details.

$
%
Enter the nominal annual rate, not the APY.
years
$
Optional amount added at the end of each month.
Annual Percentage Yield 5.1162%
Estimated Final Balance $19,626.43
Total Interest Earned $3,626.43
Total Contributions $16,000.00
Equivalent Monthly Yield 0.4167%
Balance composition 18.48% from interest
Deposits and contributions Interest earned

Year-by-Year Projection

Year Contributions Interest Balance

What Is APY?

Annual Percentage Yield (APY) shows the effective yearly return on a deposit after compounding is included. Unlike a simple interest rate, APY reflects how often earned interest is added back to the balance.

This makes APY useful for comparing savings accounts, certificates of deposit, money market accounts, and other interest-bearing products. A higher compounding frequency generally produces a slightly higher APY when the nominal rate stays the same.

APY = (1 + r ÷ n)n − 1

Multiply the final result by 100 to express APY as a percentage.

r The nominal annual interest rate written as a decimal.
n The number of compounding periods in one year.

APY Calculation Example

Suppose an account offers a 5% nominal annual interest rate compounded monthly. The monthly compounding frequency is 12.

(1 + 0.05 ÷ 12)12 − 1

The result is approximately 0.051162, so the account's APY is about 5.1162%.

The APY is slightly higher than the stated 5% rate because interest is added to the account every month and then earns additional interest.

How It Works

Calculate APY in Three Simple Steps

The calculator converts the stated annual rate into an effective annual yield and estimates your future savings balance.

1

Enter Your Rate

Add the nominal annual interest rate offered by the bank or financial institution.

2

Select Compounding

Choose how often interest is compounded, such as monthly, quarterly, or daily.

3

Review Your Results

See the APY, future balance, interest earned, and a year-by-year savings projection.

APY vs APR

What Is the Difference Between APY and APR?

Both are annual percentage measures, but they describe different sides of a financial product.

Feature APY APR
Main purpose Shows the effective return earned on savings or deposits. Shows the annual cost of borrowing before or with certain fees, depending on the product.
Compounding Includes the effect of compounding. Usually presents a stated annual borrowing rate and may not show compounding in the same way.
Commonly used for Savings accounts, CDs, and money market accounts. Loans, credit cards, mortgages, and other borrowing products.
Comparison goal A higher APY is generally better for a saver. A lower APR is generally better for a borrower, assuming other terms are equal.
Frequently Asked Questions

APY Calculator FAQs

Understand how APY, compounding, deposits, and savings projections work.

What does APY mean?

APY means Annual Percentage Yield. It represents the effective annual return on an interest-bearing account after compounding is included.

How is APY calculated?

APY is commonly calculated with the formula APY = (1 + r ÷ n)n − 1, where r is the nominal annual rate and n is the number of compounding periods per year.

Is APY the same as the interest rate?

No. The stated interest rate is the nominal rate, while APY includes the effect of compounding. APY may therefore be higher than the nominal rate.

Does a higher compounding frequency increase APY?

Yes. When the nominal interest rate is unchanged, more frequent compounding usually produces a slightly higher APY because interest begins earning interest sooner.

Does APY include monthly deposits?

APY itself depends on the nominal rate and compounding frequency, not on your deposit amount. This calculator uses your initial and monthly deposits only to estimate the future account balance and interest earned.

Can APY change over time?

Yes. APY on a variable-rate account can change when the institution changes its interest rate. A fixed-rate product may keep the same rate for a defined term.

Note: This calculator provides estimates for informational purposes. Actual account results may differ because of rate changes, fees, deposit timing, rounding policies, taxes, or product-specific terms.