APY Calculator
Convert an interest rate to annual percentage yield, or an APY back to its rate, for any compounding
Convert
Annual percentage yield (APY)
5.116%
A 5.000% rate compounded monthly earns 5.116% a year
Interest in the first year
$511.62
on $10,000
Balance after 10 years
$16,470.09
Interest rate (APR)
5.000%
APY
5.116%
compounded monthly
Extra interest from compounding
First-year interest on $10,000 beyond yearly compounding, at a 5.00% rate
Compound vs simple interest
$10,000 over 10 years
APY by Compounding Frequency
| Compounding | APY | Interest in Year 1 | More Than Yearly |
|---|---|---|---|
| Daily | 5.1267% | $512.67 | $12.67 |
| Monthly | 5.1162% | $511.62 | $11.62 |
| Quarterly | 5.0945% | $509.45 | $9.45 |
| Twice a year | 5.0625% | $506.25 | $6.25 |
| Yearly | 5.0000% | $500.00 | $0.00 |
| Continuously | 5.1271% | $512.71 | $12.71 |
All rows use the same 5.000% nominal rate.
APY vs APR
The interest rate (APR) is the yearly rate before compounding. The APY includes the interest you earn on interest, so it shows what your money actually grows by in a year. Savings accounts and CDs quote APY; loans usually quote APR. The more often interest compounds, the higher the APY, but the gain from daily over monthly compounding is small.
The Formulas
APY = (1 + APR ÷ n)^n − 1
Continuous: APY = e^APR − 1
APR = n × ((1 + APY)^(1/n) − 1)
n is the number of compounding periods per year (365 for daily).
Using APY
- •Compare savings accounts by APY: it already accounts for compounding
- •A higher rate matters far more than more frequent compounding
- •Variable APYs on savings accounts can change at any time
- •On loans, look at the APR, which includes fees
- •Interest earned is usually taxable income