APY Calculator

Convert an interest rate (APR) into annual percentage yield (APY) and see what your savings earn in a year.

APY

4.594%

Interest earned in 1 year: $459.40
Balance after 1 year: $10,459.40
Extra from compounding: $9.40

APY4.594%

Results are estimates for planning and are not financial advice.

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Quick answer

A 4.5% rate compounded monthly gives an APY of about 4.594% — $459 on a $10,000 deposit in a year.

How it works

APY shows what you actually earn in a year once interest compounds. The more often interest compounds, the higher the APY compared with the stated rate.

Formula

APY = (1 + r ÷ n)^n − 1, where r = stated rate and n = compounding periods per year

Assumptions & limitations

Results are rounded for display.

Frequently asked questions

What's the difference between APR and APY?

APR is the simple yearly rate. APY includes the effect of compounding, so it's always equal to or higher than APR.

Why do banks advertise APY?

For savings, APY is the higher and more accurate number, and US banks are required to disclose it.