APY Calculator
The Annual Percentage Yield (APY) Calculator helps you calculate the true return on your savings or investments, including the effect of compound interest. Unlike simple interest rates, APY shows what you'll actually earn.
APY Calculator
Calculate true annual return with compound interest
APY Results
About APY Calculator
The Annual Percentage Yield (APY) Calculator helps you calculate the true return on your savings or investments, including the effect of compound interest.
When comparing savings accounts, CDs, or investment products, always compare APY — it already includes the compounding effect.
APY Formula
APY = (1 + r/n)^n - 1
Where: r = interest rate, n = compounding frequency per year
Example: 5% compounded monthly = (1 + 0.05/12)^12 - 1 = 5.12% APY
APY Comparison by Compounding Frequency
| Interest Rate (APR) | Monthly APY | Daily APY | Continuous APY |
|---|---|---|---|
| 4%% | 4.07%% | 4.08%% | 4.08%% |
| 5%% | 5.12%% | 5.13%% | 5.13%% |
| 6%% | 6.17%% | 6.18%% | 6.18%% |
| 7%% | 7.23%% | 7.25%% | 7.25%% |
| 8%% | 8.30%% | 8.33%% | 8.33%% |
APY vs APR — What's the Difference?
APY (Annual Percentage Yield)
• Includes compound interest
• Used for savings accounts, CDs, investments
• Shows what you actually earn
• Higher = better for savers
APR (Annual Percentage Rate)
• Does NOT include compounding
• Used for loans, credit cards, mortgages
• Shows base interest rate
• Lower = better for borrowers
Frequently Asked Questions
APY (Annual Percentage Yield) includes compound interest. APR (Annual Percentage Rate) does not. For savings, APY matters more because it shows what you'll actually earn. Example: 5% APR compounded monthly = 5.12% APY. Always compare APY when choosing savings accounts or CDs.
Formula: APY = (1 + r/n)^n - 1, where r = interest rate, n = compounding frequency per year. Example: 5% interest compounded monthly = (1 + 0.05/12)^12 - 1 = 5.116%. The more frequent the compounding, the higher the APY.
Daily (365 times/year): Highest returns. Monthly (12 times/year): Most common for savings accounts. Quarterly (4 times/year): Common for CDs. Semi-annually (2 times/year): Some bonds. Annually (1 time/year): Lowest returns. More frequent = better returns.
On ₹1,00,000 at 5% for 1 year: Annual compounding = ₹5,000 interest, Monthly = ₹5,116 interest, Daily = ₹5,127 interest. The difference grows larger over time and with higher rates.
In 2024-25, good savings APY: High-yield accounts: 4-5%, Traditional banks: 0.01-0.50%, Online banks: 4-5.5%, CDs: 4.5-5.5%. Always compare APY, not just interest rate.
Always compare APY directly — it already includes compounding effects. A 5% APY from daily compounding earns the same as 5% APY from monthly compounding. Higher APY = better return, regardless of compounding frequency.
About the APY Calculator
The Annual Percentage Yield (APY) Calculator helps you calculate the true return on your savings or investments, including the effect of compound interest. Unlike simple interest rates, APY shows what you'll actually earn.
Formula
Reference Table
| Category | Value |
|---|---|
| 4% | 4.07% |
| 5% | 5.12% |
| 6% | 6.17% |
| 7% | 7.23% |
| 8% | 8.30% |