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CalcTortoise

APY Calculator

See the real yearly yield of a rate once compounding is counted, and what a deposit will earn in your term.

Written by the CalcTortoise editorial team · How we work

year
Assumed: monthly compounding. Change

Interest compounded

Compare CDs by APY — it already includes the effect of compounding.

Year-by-year growth

YearInvestedReturnsValue
Year 1$10,000$407$10,407

Worked example

A 4% rate compounded monthly is an APY of 4.074%. Deposit $10,000 for 12 months and you earn $407, ending with $10,407.

Deposit
$10,000
Interest rate (APR)
4%
APY with monthly compounding
4.074%
Interest earned
$407
Ending balance
$10,407
The same 4% rate under each compounding schedule
CompoundingAPYInterest in 12 monthsEnding balance
Monthly4.074%$407$10,407
Quarterly4.060%$406$10,406
Semiannually4.040%$404$10,404
Annually4.000%$400$10,400
How APY is calculated

APY = (1 + r ÷ n)n − 1

Here r is the stated yearly rate as a decimal and n is the number of times interest is added in a year. The more often interest is added, the higher the APY, but the gain from monthly to daily is small.

APY or APR?

APR is the stated rate. APY includes compounding. Banks must quote APY on deposit accounts, so use it to compare savings accounts and certificates of deposit. Loans are the other way around: you compare them by APR.

Frequently asked questions

What is APY?

APY, the annual percentage yield, is the interest you actually earn in a year once compounding is counted. A 4% rate compounded monthly has an APY of 4.074%. A bank’s stated rate on its own, without compounding, is called the APR or nominal rate.

How do I convert APR to APY?

APY = (1 + APR ÷ n)^n − 1, where n is how many times a year interest is added. At 4% the APY is 4.074% with monthly compounding, 4.060% quarterly and 4.000% annually.

Does a higher APY always mean more money?

For the same deposit and term, yes. A rate of 5% compounded monthly has an APY of 5.116%, so $10,000 earns more than at 4%. Compare accounts by APY, not by the nominal rate, so each offer is measured the same way.

Is the APY on a savings account guaranteed?

Not usually. Savings and money market account rates are variable and can change at any time. A certificate of deposit locks its rate for the term. This calculator assumes the rate stays the same.

Is the interest taxable?

Interest is generally taxable in the year it is credited. The figures here are before tax and are an illustration, not investment, tax or legal advice.

Sources and method

Compound interest at the rate and compounding you choose. Bank rates are your input; they change from bank to bank.

No outside data is used. The numbers you type in are the only inputs.

Page and formula last reviewed . How we calculate · Editorial policy · Corrections and change log

Last updated 20 October 2026. For information only — not financial advice. Check the final figures with your lender or bank.