APY Calculator

Calculate annual percentage yield from APR and compounding frequency.

By Konstantin Iakovlev · Updated September 2026 · Source: SEC

%

APY

5.127%

APY − APR

+0.1267%

Monthly Interest Earned

$10,000.00$42.72/mo
$50,000.00$213.61/mo
$100,000.00$427.23/mo

Use the APY Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Converting an Annual Percentage Rate into an Annual Percentage Yield reveals the real return on an investment or the true cost of a loan, because APY folds in the effect of compounding that APR leaves out. That distinction carries weight: with consumer prices up 3.4% in the 12 months to August 2026 (BLS CPI-U), knowing your APY is how you confirm your returns are actually outpacing the cost of living.

The calculation runs on the formula APY = (1 + (APR / n))^n - 1, where 'APR' is the Annual Percentage Rate and 'n' is the number of compounding periods per year. By capturing interest earned on top of previously accumulated interest, this gives a complete view of how an investment actually performs over the year.

Treating APR as if it were the real return is a frequent slip, so always factor in how often interest compounds. A higher APY works in your favor on investments but signals a steeper effective cost on loans, which cuts both ways. Note too that the math here assumes a fixed APR and steady compounding throughout the year, an assumption that breaks down in variable-rate situations.

Example: Savings Account Growth Over One Year

  1. 1 A savings account quotes an APR of 4.75% compounded monthly, and you deposit $10,000. Enter 4.75% and choose Monthly (12x).
  2. 2 APY = (1 + 0.0475 / 12)^12 − 1 = 1.003958^12 − 1 = 4.855%. The calculator shows an APY of 4.855% and an APY − APR gap of +0.1048%.
  3. 3 Over a year, $10,000 left untouched grows to $10,000 × 1.04855 = $10,485.48, compared with $10,475 at a simple 4.75%. Monthly compounding adds about a tenth of a point.
  4. 4 The Monthly Interest Earned table puts that at $40.46 a month on $10,000 ($10,000 × 4.855% / 12). Compare this APY, not the 4.75% APR, with other accounts' APYs.

Source: SEC · Last updated: September 2026

Frequently Asked Questions

What is the difference between APR and APY?
APR is the annual interest rate without compounding. APY includes the effect of compounding and is always equal to or higher than APR. A 5% APR compounded monthly yields a 5.12% APY.
How is APY calculated?
APY = (1 + r/n)^n - 1, where r is the annual rate and n is the number of compounding periods per year. More frequent compounding (daily vs monthly) produces a slightly higher APY.
Why do savings accounts advertise APY instead of APR?
Banks advertise APY for savings accounts because it appears higher than APR due to compounding. For loans, they advertise APR because it appears lower. Always compare APY to APY or APR to APR for accurate comparisons.

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