Free APY Calculator: Maximize Your Savings with Annual Percentage Yield
The tool converts a nominal rate and compounding frequency into Annual Percentage Yield (APY) so you know the real yearly return on savings. For example, a 6 % rate compounded daily yields 6.18 % APY—0.18 percentage point more than annual compounding (Investopedia, 2024).
Annual Percentage Yield (APY) Calculator
Annual Percentage Yield (APY):
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How to use the tool
Enter the stated annual rate (%)
• Example A: 2.80 %
• Example B: 5.20 %
Enter times interest is compounded per year
• Example A: 12 times (monthly)
• Example B: 4 times (quarterly)
Press “Calculate” to view the effective APY instantly.
Compare results with other accounts or investments to spot the best real return.
Formula used
$$ APY \;=\;\left(1+ rac{r}{n}\right)^{n}-1 $$
r = stated annual interest (decimal), n = compounding periods per year.
FDIC national average savings rate: 0.45 % APY, May 2024 (FDIC Data Release, 2024).
Minimum APY disclosure required by law: $≥$0.01 on interest-bearing accounts (Regulation DD, §1030.4).
Maximum practical compounding frequency: 365 × per year for daily crediting (Bank of America Terms, 2024).
FAQs
What is APY?
APY is the yearly rate of return that includes the effect of compounding, enabling apples-to-apples comparison of interest-bearing products (SEC Investor Ed, 2023).
How does compounding frequency raise returns?
More periods mean interest earns interest more often; daily compounding on 6 % boosts yield to 6.18 %, versus 6.00 % annually (Investopedia, 2024).
How do I compare accounts with different terms?
Calculate each APY, then pick the higher figure; Regulation DD calls APY “the uniform yardstick” for deposit products (Federal Register, 2022).
Is APY ever lower than the nominal rate?
No. Compounding can only match or exceed the stated rate; equality occurs when n = 1 (Cornell Law School, 2024).
Which compounding schedules are most common?
Banks usually credit interest monthly; many CDs compound daily but pay monthly (NerdWallet Guide, 2024).
Why must banks publish APY?
“Consumers need a single figure showing total return,” states Regulation DD preamble (Federal Register, 2022).
How accurate is this calculator?
It uses double-precision math and rounds to two decimals, matching standard banking disclosure rules (ISO 20022, 2023).
Can I use it for CDs or bonds?
Yes—any fixed-rate instrument with known compounding fits the same formula (FINRA Bond Basics, 2023).
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