MayoCalc / Finance

APY Calculator

See how much interest you will earn at any APY rate. Compare savings accounts and CDs.

Last updated April 2026
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Disclaimer: This calculator is for general educational and informational purposes only. It does not constitute financial advice, investment advice, tax advice, or legal advice and is not a substitute for consultation with a qualified professional. No fiduciary or advisory relationship is created by your use of this tool. Results are estimates based on the inputs you provide, standard mathematical formulas, and publicly available data that may not be current and may not reflect your individual financial situation, applicable tax laws, or other relevant factors. Neither MayoCalc nor Cook Media Systems assumes any liability for losses, damages, or other consequences arising from the use of any information or results provided by this tool. Always consult a qualified financial advisor, certified public accountant, or attorney before making financial decisions. See our full Disclaimer and Terms of Service.

What Is APY?

Annual Percentage Yield (APY) is the real rate of return on a savings account or investment when compound interest is factored in. Unlike the stated interest rate (APR), APY accounts for how often interest is compounded during the year. The more frequently interest compounds, the higher the APY relative to the stated rate. APY is the number you should compare when choosing between savings accounts, CDs, or money market accounts because it reflects what you actually earn.

APY = (1 + r/n)^n - 1
Where r = annual interest rate, n = compounding periods per year

How to Use This Calculator

Enter the annual interest rate and select the compounding frequency (daily, monthly, quarterly, semi-annually, or annually). The calculator shows the effective APY. You can also enter a deposit amount and time period to see your total earnings. Compare two accounts side by side to see how compounding frequency and rate differences affect your returns over time.

APY vs. APR

APR (Annual Percentage Rate) is the stated interest rate without compounding. APY includes the effect of compounding. A savings account advertising 5.00% APR with daily compounding actually yields 5.13% APY. The difference grows with higher rates and more frequent compounding. For savings, always compare APY. For loans, APR is the standard comparison metric (though the effective cost also depends on compounding and fees).

High-Yield Savings in 2026

Online banks and credit unions typically offer significantly higher APY than traditional brick-and-mortar banks. As of early 2026, high-yield savings accounts offer 4.0-5.0% APY, while the national average for savings accounts at traditional banks remains below 0.5%. The difference on $10,000 over a year is roughly $450 versus $50. The Compound Interest Calculator can model long-term growth at different rates.

APY Calculator FAQ

Does compounding frequency matter much?
At lower interest rates (under 2%), the difference between daily and monthly compounding is negligible. At higher rates (5%+), daily compounding can add 10-15 basis points over annual compounding. On large balances held for years, this adds up. But the interest rate itself matters far more than compounding frequency.
Is APY guaranteed?
For savings accounts and money market accounts, APY is variable and can change at any time based on the bank's discretion and prevailing interest rates. For CDs, the APY is fixed for the term of the CD. If you want a guaranteed rate for a specific period, a CD locks it in. Use the CD Calculator to compare terms.
Is interest from savings accounts taxable?
Yes. Interest earned in a standard savings account is taxable as ordinary income. Your bank will issue a 1099-INT if you earn more than $10 in interest during the year. The effective after-tax return is your APY multiplied by (1 - your marginal tax rate). High-yield savings in a tax-advantaged account (like an HSA) avoids this.

APY vs. APR: Why the Difference Matters

Annual Percentage Yield (APY) accounts for compounding, while Annual Percentage Rate (APR) does not. A savings account advertising 5.00% APR compounded daily actually yields 5.13% APY because interest earned each day begins earning its own interest the next day. The difference between APR and APY grows larger as the compounding frequency increases and as the nominal rate rises. At lower rates like 1%, the gap is negligible (1.005% APY), but at 10% with daily compounding the gap widens to 10.52% APY.

Federal regulations require banks to disclose APY on deposit products so consumers can make accurate comparisons. For loans, lenders are required to disclose APR. When comparing savings accounts, always compare APY to APY, as two accounts advertising the same interest rate but with different compounding frequencies will produce different actual yields. The CD Calculator applies the same compounding principles to certificate of deposit returns.

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APY vs. APR: Why It Matters

APY (Annual Percentage Yield) includes the effect of compounding, while APR (Annual Percentage Rate) does not. A savings account advertising 5% APR compounded daily actually yields 5.13% APY. The more frequently interest compounds, the wider the gap. This calculator converts between APR and APY for any compounding frequency so you can compare offers on equal terms.

When comparing savings accounts, CDs, or high-yield accounts, always compare APY to APY. Banks sometimes advertise whichever number looks better for their product. For loans, APR is the standard disclosure, but the actual cost depends on compounding. This calculator strips away the marketing and shows you the real return or cost.