APY Calculator

APR is the simple stated rate; APY is what a year actually produces once each period's interest starts earning its own interest. At 4.5% APR compounded daily: (1 + 0.045/365)^365 − 1 = 4.603% APY. The gap grows with the rate and the frequency — negligible at 1%, meaningful at 10%. Directionally: for savings, APY is the truth and it's higher than APR; for debt, the same compounding works against you, and a credit card's APR understates what carrying a balance costs.

Far less than marketing implies. At 4.5% APR on $10,000: annual compounding earns $450.00, monthly $459.40, daily $460.25 — the daily-vs-monthly gap is 85 cents a year. Meanwhile moving from 4.5% to 4.6% APR earns about $10 more. The honest shopping rule: compare accounts by their advertised APY (which already bakes in the compounding) and chase the bigger number; the compounding schedule behind it is trivia. This calculator exists for decoding, not for optimizing pennies.

Usual suspects, in order: the rate changed mid-year (savings APYs float with the Fed — the advertised number is current, not guaranteed); your balance moved (APY assumes the money sits all year; deposits and withdrawals prorate everything); a promotional rate applied only to the first months or up to a balance cap; or monthly fees quietly ate the interest — a $5 monthly fee wipes out the entire yield on ~$1,300 at 4.5%. Banks compute correctly almost always; assumptions are what break.

APY is compound interest normalized to exactly one year — the annual growth factor. For multi-year projection, compound the APY: $10,000 at 4.6% APY for 10 years is 10,000 × 1.046^10 = $15,682. That's what the compound interest calculator does with contributions and time; this tool answers the prior question of what annual rate you're truly getting from a quoted APR. Chain them: decode the rate here, project the decades there.