Savings & Growth
APY Calculator
Turn a nominal rate (APR) into the annual percentage yield (APY) an account really pays, and see what compounding monthly or daily adds to your deposit.
Annual percentage yield (APY)
4.59%
what the account really earns in a year
Interest earned
$459
Ending balance
$10,459
A 4.50% nominal rate compounded 12 times a year is an annual percentage yield of 4.59%: interest added during the year earns interest too.
On $10,000 over 1 year, that earns $459, for a balance of $10,459.
Compounding more often adds less and less: even continuous compounding would only reach 4.60%. Compare accounts on their APY, not their nominal rate.
Your numbers
1 = yearly, 4 = quarterly, 12 = monthly, 365 = daily.
The same nominal rate, compounded more often
- Once a year
- 4.50%
- Quarterly
- 4.58%
- Monthly
- 4.59%
- Daily
- 4.60%
Each bar shows what compounding adds above the nominal rate, up to the most it could add (continuous compounding). Going from yearly to monthly makes a visible difference; from monthly to daily, only a few hundredths of a point.
The APY formula
APY = (1 + r ÷ n)ⁿ − 1
r is the nominal annual rate (as a decimal) and n the number of times interest is added each year. The interest earned on a deposit is Deposit × ((1 + r ÷ n)n × t − 1), where t is the time in years, counting whole compounding periods only. Continuous compounding, the upper limit, gives eʳ − 1.
Nominal rate vs. annual yield
Banks advertise rates in two ways. The nominal rate (APR) is the simpler number, but it ignores that interest added during the year earns interest too. The annual percentage yield (APY) includes that effect, which is why it is the number to compare between accounts, and why savings products like to show it while loans prefer the lower-looking APR.
Example: a savings account. A 4.5% nominal rate compounded monthly is an APY of 4.59%; compounded daily, 4.60%. On $10,000 for a year, that is $459 or $460 of interest instead of the $450 the nominal rate suggests.
Example: a Spanish deposit. A deposit at a 3% TIN paying interest every month has a TAE of 3.04%. Paid quarterly, the TAE would be 3.03%: the same nominal rate, a slightly different annual yield.
APY is also the fair way to compare a savings account with a Treasury bill, whose compounded annual yield the Treasury bill calculator works out. To see the same compounding over many years, with monthly deposits, use the compound interest calculator.
APY FAQ
What is the difference between APR and APY?+
APR, or the nominal rate, is the yearly rate before compounding. APY is what you actually earn in a year once the interest added during the year starts earning interest itself. With yearly compounding they are equal; with monthly or daily compounding the APY is a little higher.
How do I calculate APY?+
APY = (1 + r ÷ n)ⁿ − 1, where r is the nominal rate as a decimal and n the number of compounding periods a year. A 4.5% rate compounded daily: (1 + 4.5% ÷ 365)³⁶⁵ − 1 = 4.60%.
Does daily compounding make much difference?+
Less than it sounds. At 4.5%, monthly compounding gives an APY of 4.59% and daily compounding 4.60%. The big step is from yearly to monthly; beyond that, the rate itself matters far more than how often it compounds.
What are TIN and TAE?+
In Spain and much of Latin America, accounts and deposits quote a TIN (the nominal rate) and a TAE (the equivalent annual rate). For a deposit with no fees, the TAE is the APY this calculator shows; a loan’s TAE can also include fees.
How do I convert an APY back to the nominal rate?+
Reverse the formula: nominal rate = n × ((1 + APY)^(1 ÷ n) − 1). An APY of 5% with monthly compounding needs a nominal rate of about 4.89%.
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Educational tool, not advice. This calculator illustrates a standard formula using the numbers you enter. It does not account for your full financial picture, taxes, or local market conditions, and it is not a recommendation to buy, sell, or hold any asset. Speak with a licensed professional before making investment decisions.
See our full disclaimer and how we calculate.
Last reviewed 2026-11-10 by the Yield Analyst team