APY Calculator

Using the apy estimate

Annual percentage yield converts a stated annual rate into the growth produced by repeated compounding over one year. This calculator helps compare nominal rates with different compounding schedules on a consistent basis. It also translates the yield into dollar interest on a deposit. A higher APY under the model describes the mathematics of the stated terms, not proof that an account is suitable or that the rate will remain in place.

Step-by-step inputs

1. Stated interest rate (APR %). Enter the nominal annual stated rate before compounding. An already-advertised APY should not be entered here to compound it a second time. Starting example: 4.5 .
2. Compounding. Choose how often the stated rate compounds. This is separate from how often you contribute money or receive statements. Starting example: Monthly .
3. Deposit. Enter a balance held throughout the modeled year. Additional deposits and withdrawals are not included. Starting example: $10,000 .

Worked example with the starting values

Using the starting inputs, the estimate is APY: 4.594% .

The annual rate is divided among the selected compounding periods. Each period's growth then earns growth in subsequent periods. The extra-from-compounding line compares annual compound interest with simple interest at the same nominal rate and starting balance.

Interest earned in 1 year

$459.40

Balance after 1 year

$10,459.40

Extra from compounding

$9.40

Compare stated interest rate (apr %) scenarios

All other inputs stay at their starting values. These are modeled comparisons, not quotes, predictions or individual recommendations.

Make a useful comparison

Compare accounts using quoted APY where available, then verify the balance and eligibility conditions. A promotional yield may depend on a minimum balance, qualifying activity or a limited time window. This tool cannot determine whether those conditions apply.

Use the dollar-interest breakdown to put small yield differences in context. More frequent compounding increases effective yield at a fixed positive nominal rate, but the extra dollars depend on the deposit size. Fees can outweigh a small compounding advantage.

Keep deposit yield separate from borrowing APR comparisons. Both may be annual percentages, but disclosures can include different fees and conventions. This calculator's APR-labeled field is used as a nominal interest-rate input, not a complete borrowing-cost disclosure.

Common mistakes to avoid

• Do not compound an effective annual yield again. That would overstate what the quoted account terms imply.
• The one-year dollar estimate assumes a constant balance apart from retained interest and a constant rate. Withdrawals, rate tiers or rate changes need a different projection.
• Taxes and account fees are not deducted. The displayed interest is modeled gross growth, not necessarily spendable net earnings.