APY Calculator

What this APY calculator does

The number printed next to a savings account is not always the number that makes two accounts easy to compare. A stated interest rate describes the rate before compounding; APY expresses the annualized yield after compounding is included. This calculator lets you convert in either direction and shows the dollar effect on a starting balance.

Use it for a savings account, money-market account, or certificate of deposit when the rate and compounding frequency are known. The result is a transparent estimate, not a quote from a bank. For a multi-year CD balance, use the CD calculator; for contributions over time, use the compound interest calculator.

How to use the calculator

1. Choose Interest rate to APY when a bank gives you a stated or nominal rate. Choose APY to interest rate when you want to reverse the conversion.
2. Enter the percentage exactly as shown in the account disclosure. Do not enter 0.05 for 5%; enter 5.
3. Select how often the account compounds. Daily, monthly, quarterly, semiannual, and annual frequencies produce different effective yields.
4. Enter a starting balance to see the one-year interest and ending balance. The balance does not change the APY itself in this simple, single-rate model.

The APY formula

For a nominal annual rate r expressed as a decimal and n compounding periods per year:

APY = (1 + r / n)ⁿ − 1

To solve backward from APY to the nominal rate:

r = n × ((1 + APY)^1/n − 1)

The calculator uses the selected frequency for n: 365 for daily, 12 for monthly, 4 for quarterly, 2 for semiannual, and 1 for annual compounding. The CFPB’s Regulation DD formula is based on a 365-day year and includes additional rules for account terms, tiered rates, and actual days in a CD term. Those account-specific rules are outside this general comparison tool.

Worked example: 5% compounded monthly

Suppose a savings account advertises a 5.00% stated rate, compounds monthly, and you keep $10,000 deposited for one year.

• Monthly rate: 5% ÷ 12 = 0.4167% per month
• APY: (1 + 0.05 ÷ 12)¹² − 1 = 5.116%
• Interest after one year: $511.62
• Ending balance: $10,511.62

The compounding lift is about 0.116 percentage points above the 5.00% stated rate. With annual compounding, the APY would remain 5.00%; with more frequent compounding, the APY would be slightly higher, assuming the same stated rate and no fees.

APY, fees, and account disclosures

APY is not a complete measure of every account’s economic value. A bank may advertise a bonus, impose a maintenance fee, limit the balance that earns a rate, change a variable rate, or charge an early-withdrawal penalty on a time account. The CFPB requires deposit-account disclosures to state APY and other material terms, so use the account disclosure—not a headline rate alone—when making a final comparison.

For a CD, compare the result with the account’s stated maturity, early-withdrawal terms, and whether interest is paid out or remains on deposit. For an emergency reserve, compare the yield with access and penalty rules using the emergency fund calculator. The APR vs. APY guide explains why APY belongs to deposits while APR is normally used for borrowing.

Assumptions and limitations

• One fixed rate applies for the full year.
• Interest remains in the account and compounds at the selected frequency.
• No deposits, withdrawals, fees, taxes, bonuses, rate tiers, or rate changes are modeled.
• The one-year dollar example assumes a starting balance is present on day one.
• A real bank’s APY may use actual days, a leap-year convention, or product-specific disclosure rules.

These assumptions make the formula easy to check. They also explain why the calculator should be used for comparison and education rather than as a promise of account earnings.

Methodology and review

ToolGrym’s calculation uses the standard effective-yield relationship between a nominal rate and compounding frequency. The implementation is covered by automated finance tests, and the source links above are primary regulatory or educational references. The editorial team reviewed the formula, inverse conversion, frequency mapping, and worked example on July 20, 2026.