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APY calculator
The annual percentage yield of any interest rate, by compounding frequency, and the interest it earns.
APY is what an account actually earns in a year once compounding is counted. A 5% rate compounded monthly is an APY of 5.12%: $10,000 earns $512 in a year instead of $500.
APY
5.12%
An APR of 5% compounded monthly earns 5.12% in a year.
$10,000 earns $512 in interest in the first year.
| Compounding | APY | Interest on $10,000 in a year |
|---|---|---|
| Yearly | 5% | $500 |
| Quarterly | 5.09% | $509 |
| Monthly | 5.12% | $512 |
| Daily | 5.13% | $513 |
| Continuous | 5.13% | $513 |
The formula
APY = (1 + APR ÷ n)n − 1
n is the number of compounding periods in a year: 12 for monthly, 365 for daily. US banks must state the APY of deposit accounts under the Truth in Savings rules (Regulation DD), which define it as the interest earned over a year divided by the principal.
APY by compounding
| Rate | Yearly | Monthly | Daily |
|---|---|---|---|
| 2% | 2% | 2.02% | 2.02% |
| 4% | 4% | 4.07% | 4.08% |
| 5% | 5% | 5.12% | 5.13% |
More frequent compounding adds a little: at 5%, daily compounding gives 5.13% against 5.12% monthly.
Questions people ask
What is the difference between APR and APY?
APR is the stated yearly rate without compounding; APY includes it. They are equal only when interest is added once a year.
How much interest will 10000 earn in a high yield savings account?
It depends on the APY: at 4%, $400 in a year; at 5%, $500. Account rates change, so use the APY the bank shows today.
Related
The compound interest calculator projects balances over many years, and the emergency fund calculator sets how much to keep in savings.
Sources
- Consumer Financial Protection Bureau, Regulation DD (Truth in Savings), Appendix A: annual percentage yield calculation.
Last reviewed by Asier Fernández, editor, on . Educational information only, not financial advice. How we calculate