APY calculator
Convert a stated annual interest rate to annual percentage yield (APY).
Your result
APY includes the effect of compounding over one year.
How compounding affects APY
Worked example
A 4% annual interest rate compounded monthly yields about 4.0742% APY. The estimate assumes a fixed rate, equal compounding periods, and interest left on deposit throughout the year.
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When to use APY instead of the stated rate
Enter the stated rate if you need to calculate APY
Look for the annual interest rate and how often the account compounds. A stated 4% rate yields 4% when compounded annually and about 4.0742% when compounded monthly. The monthly calculation earns interest on earlier interest during the year.
If the institution already quotes an APY, use that figure directly when a savings calculator asks for APY. Converting it again would count compounding twice.
Check which balance and time period earn the advertised yield
Two accounts can quote the same APY and still produce different results for you. Check whether the yield applies to your full balance, requires a minimum balance, or changes after an introductory period. Also compare fees and withdrawal terms. A single rate and compounding frequency can’t model a tiered or changing rate.