Use APY for savings
APY shows what the rate earns after interest is added back to the balance.
APY calculator
Free APY Calculator
An APY calculator converts a stated annual rate into annual percentage yield, then estimates how your balance grows with compounding and optional monthly deposits.
APY
5.12%
Final balance
$21,303.06
Interest earned
$2,303.06
Calculator inputs
Compare compounding yield
Results
5.00% APR becomes 5.12% APY
After 3 years, the projected balance is $21,303.06 with $2,303.06 in interest.
Starting balance
$10,000.00
Total contributions
$9,000.00
Total principal
$19,000.00
Interest earned
$2,303.06
Yearly view
Balance growth
YearBalanceInterest
1$13,581.33$581.33
2$17,345.89$1,345.89
3$21,303.06$2,303.06
Quick guidance
APR versus APY
APR is the stated annual rate. APY is the effective annual yield after compounding, which is why APY is usually the better number for comparing savings accounts and CDs.
Use APR for borrowing
APR is more useful for loan offers because fees and repayment terms affect cost.
Frequency matters
Daily compounding creates a slightly higher APY than monthly or annual compounding.
Compare like with like
When two accounts show different compounding schedules, APY makes the comparison cleaner.
Frequently asked questions
What is an APY calculator?
An APY calculator converts an annual interest rate and compounding schedule into annual percentage yield, then estimates how a balance can grow over time.
How is APY different from APR?
APR states the nominal annual rate before compounding. APY includes compounding, so it shows the effective annual yield on a savings balance.
Why does compounding frequency change APY?
More frequent compounding adds interest to the balance sooner, and that interest can earn additional interest during the same year.
Can I use this APY calculator for loans?
It is best for savings accounts and yield comparisons. For borrowing cost, use an APR or loan repayment calculator because fees and amortization matter.
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