Omni Apy Calculator
A 5% rate compounded monthly and a 5% rate compounded quarterly are not the same deal. Annual Percentage Yield (APY) converts any nominal rate and compounding schedule into one comparable number: the effective yearly return. This calculator finds your APY, projects deposit growth, compares all compounding frequencies side by side, and can work backwards from a target APY to the nominal rate you need.
APY Calculator
Find your annual percentage yield, compare compounding, or reverse-solve the rate.
| Compounding | Periods/yr | APY at your rate |
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How APY is calculated
APY answers one question: if I leave money alone for a year and all interest is reinvested, what is my true yearly return? The formula:
APY = (1 + r/n)^n - 1
where r is the nominal rate as a decimal and n is compounding periods per year. For 5% compounded monthly: (1 + 0.05/12)^12 - 1 = 5.116%. The more frequent the compounding, the higher the APY for the same nominal rate, which is exactly why banks quote whichever number looks better.
Worked example
Rate 5%, compounded monthly, deposit $10,000, 10 years: APY = 5.116%. Final balance = 10,000 x (1 + 0.05/12)^120 = $16,470.09; interest earned = $6,470.09. Switch the compounding to daily in the comparison table and the APY rises to 5.127%, worth an extra $16.55 over the decade on this deposit. Small per year, real over time.
APY vs APR
APR (annual percentage rate) is the nominal rate before compounding: 5% APR. APY (annual percentage yield, also called the effective annual rate, EAR) includes compounding: 5.116% APY. When comparing savings accounts, CDs, or money-market funds, compare APY to APY. A 5.00% APR account compounding monthly beats a 5.05% APR account compounding annually (5.116% vs 5.050% APY). Run both in the reverse mode to see what nominal rate each APY implies.
What competing calculators miss
Every APY tool on the SERP solves one direction: rate in, APY out. None works backwards, so a saver asking "what nominal rate do I need to actually earn 6%?" has to guess. This page adds the reverse solver: 6% APY with monthly compounding needs a 5.841% nominal rate. It also turns the Motley Fool's static comparison table into a live one: enter your rate once and see the APY at daily, weekly, biweekly, monthly, quarterly, semiannual, and annual compounding, with your choice highlighted.
What APY assumes
APY assumes the balance sits untouched for the full year and every interest payment is reinvested at the same rate. It does not include account fees, minimum-balance penalties, or tiered rates that change with the balance. Real returns can be lower if you withdraw, or if fees eat the interest.
Frequently asked questions
Is APY the same as interest rate?
No. The interest rate (APR) is the nominal rate before compounding; APY includes the compounding effect. APY is always equal to or higher than the APR for the same account.
Which compounding gives the highest APY?
Daily, for any given nominal rate. But the differences are small: at 5%, daily gives 5.127% and monthly gives 5.116%, a gap of 0.011 percentage points. The comparison table above shows all seven for your rate.
How do I find the nominal rate from a target APY?
Use the "Rate from target APY" mode: nominal rate = n x ((1 + APY)^(1/n) - 1). For 6% APY compounded monthly, that is 5.841%.
Does APY include fees?
No. APY is a standardized yield measure that excludes account fees, so a high-fee account can advertise an attractive APY while delivering less. Subtract expected fees from the projected interest to get the real picture.
Can APY change after I open an account?
Yes, for variable-rate accounts banks can change the nominal rate at any time, which changes the APY. Fixed-rate CDs lock the rate for the term.