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APY calculator

Banks often quote a rate and then say it compounds monthly. APY is the “what do I really earn in a year” version of that. Type the rate and how often it compounds.

%

Result

APY

5.12%

Here’s one

5% compounded monthly

5% compounded every month works out to about 5.12% over the year. Compound it only once and you just get 5%.

How it works

We split the yearly rate into each compounding period, grow $1 through all of them, and see how far past $1 you landed. That extra bit is the APY.

Where this comes from

APY is the yearly yield after compounding. US banks have to calculate it the way Appendix A of Regulation DD describes. A rate that compounds more often looks a little higher.

Good for

Comparing two savings accounts that don’t compound on the same schedule.

If you’re wondering

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