Annual Percentage Yield Estimator
This calculator helps you determine the annual percentage yield (APY), a key indicator of real returns on savings or investments. APY accounts for the effects of compounding interest, providing a more accurate picture than nominal rates. Ideal for comparing savings accounts, CDs, or investment opportunities.
Calculate Effective APY from Interest Rate and Compounding
Annual Percentage Yield (APY) Formula
Where:
- APY – Annual Percentage Yield
- r – nominal interest rate (as a decimal)
- n – number of compounding periods per year (e.g. monthly = 12)
- The formula shows how compound interest increases the effective yield over time.
APY is a crucial metric for evaluating real returns from interest-bearing accounts. Unlike the nominal rate, APY reflects how often interest is compounded, making it easier to compare offers. For example, a 5% rate compounded monthly yields more than annually. This calculator supports fast, accurate APY computation and is suitable for use in banking, investing, and financial planning.