APY Calculator
Compare advertised rates on the same annual-yield basis and estimate one-year interest before tax or fees.
Quick answer
Enter a nominal annual rate and compounding frequency. The calculator converts it to annual percentage yield and estimates one-year interest on the balance.
Formula used
APY = (1 + nominal rate ÷ compounds per year)^(compounds per year) − 1.
Worked example
A 4.5% nominal rate compounded monthly has an APY slightly above 4.5% because interest is credited throughout the year.
How to interpret the result
This assumes the rate and balance remain unchanged for one year and excludes fees, taxes, tiers, minimums and promotional conditions.
Sources and methodology
Consumer Financial Protection Bureau: APY. Sources explain general concepts; ToolGemini calculations use only the values you enter and the formula shown above.
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Frequently asked questions
Why is APY higher than the nominal rate?
APY includes the effect of interest being added to the balance and earning interest during the year.
Can I compare accounts using APY?
APY helps compare annual yield, but fees, withdrawal rules, rate changes and balance requirements also matter.
Does this calculate loan APR?
No. It illustrates deposit-style compounding and should not replace a lender APR disclosure.