APY Calculator
Calculate the Annual Percentage Yield on any deposit and compare effective returns across CDs, savings accounts, and money markets.
Results
The APY Calculator converts your deposit's nominal interest rate into the effective Annual Percentage Yield. The output shows the exact annual earnings on your principal after compound interest is applied.
Annual Percentage Yield Guide
APY is the standardized measure of deposit account returns mandated by federal regulation. Two accounts with the same APY produce the same annual return regardless of how often interest compounds, because APY already incorporates the compounding effect.
Why APY Matters for Depositors
APY provides a direct comparison metric across all deposit products. A CD advertising 5.00% APY and a savings account advertising 5.00% APY generate identical annual returns on the same principal. Without APY standardization, a depositor could not compare a CD compounding daily (APR 4.88%) against a savings account compounding monthly (APR 4.89%) — the APRs differ, but both produce the same 5.00% APY.
APY Across Deposit Products
There are 5 deposit products where APY serves as the primary comparison metric:
CD
4.25–5.25%Fixed RateHY Savings
4.00–5.00%Variable RateMoney Market
3.75–4.75%Variable RateChecking
0.01–1.50%Variable RateTrad. Savings
0.01–0.50%Variable RateThe Regulation DD Requirement
Regulation DD (implementing the Truth in Savings Act) requires all FDIC-insured institutions to calculate and disclose APY using a standardized formula. The regulation ensures uniform APY calculation across all banks and credit unions. Before Regulation DD, banks could present deposit yields in inconsistent formats, making accurate comparison difficult for consumers.
APY Earnings Simulator
See how different APY rates affect the dollar earnings on your deposit. Adjust the principal and APY to calculate annual, monthly, and daily interest earnings.
Earnings Breakdown
APY Optimization Strategies
There are 4 strategies to maximize APY on savings:
Rate Shopping
Compare APY rates across online banks, credit unions, and brokerage platforms to find the highest available yield.
Promotional CDs
Open promotional or special-rate CDs that offer above-market APY for a limited time. Lock the rate before the promotion expires.
CD Laddering
Build a CD ladder to capture higher long-term APY rates while maintaining annual liquidity.
Account Tiering
Some banks offer higher APY on balances above a threshold (e.g., 4.50% on balances above $25,000). Consolidate funds to reach the highest APY tier.
Calculate Your APY
Enter your deposit amount and rate above to see the exact dollar earnings at your APY.
Calculate APYFAQs
What is APY?
APY stands for Annual Percentage Yield, representing the effective annual return on a deposit after accounting for compound interest. A higher APY means more interest earned on the same principal.
How is APY calculated?
APY is calculated using the formula APY = (1 + r/n)n − 1, where r is the nominal annual rate and n is the number of compounding periods per year.
What is a good APY for a savings account?
A good APY for a savings account is 4.00% or higher. Online banks offer the highest rates, typically 4.00% to 5.25%. Traditional banks average 0.01% to 0.50%.
Does APY include fees?
No, APY does not include account maintenance fees or service charges. APY reflects only the interest yield after compounding.
How often is APY compounded?
APY already accounts for compounding frequency. Two accounts with the same APY produce the same annual return regardless of the underlying compounding schedule.