APY Calculator (Effective Rate)
Turn a nominal rate and compounding frequency into the real annual yield.
Result
APY (%)
6.168
Interest in 1 year
61,678
How it works
APY = (1 + rate/n)^n − 1
The more often interest compounds, the higher the real yield. APY captures that, so it is the fair way to compare savings offers.
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Frequently asked questions
APY vs nominal rate?
The nominal rate ignores compounding; APY includes it, so APY is always equal to or higher.
Why does frequency matter?
Compounding monthly beats annually because earlier interest itself starts earning interest.
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