Enter a nominal rate, compounding frequency, and deposit amount to find the annual percentage yield and first-year dollar earnings.
How to Use the APY Calculator
Enter the nominal annual rate, choose a compounding frequency from the dropdown (daily, monthly, quarterly, semiannually, or annually), and enter the deposit amount. The yield and first-year dollar earnings recalculate on every change.
A savings account's advertised rate rarely tells the whole story on its own — two accounts quoting the same nominal 4.5% can pay noticeably different amounts depending on how often the bank compounds it.
The Formula Behind the Yield
APY = (1 + rate÷100÷n)ⁿ − 1n is the compounding frequency: 365 for daily, 12 for monthly, and so on down to 1 for annual. Daily compounding on a 4.5% nominal rate produces an APY around 4.60%; drop to annual compounding and the APY equals the nominal rate exactly, because there's nothing left to compound within the year.
Turning the Percentage Into Dollars
The APY is abstract until it's attached to an actual balance:
Year-One Earnings = Deposit × APY$10,000 at that 4.60% daily-compounded APY earns about $460 in the first year — before any additional deposits, and assuming the rate holds for the full twelve months.
Daily Compounding Rarely Wins by Much
Most of the value of compounding shows up quickly. Moving from annual to monthly compounding at a normal savings rate is worth real basis points; moving from monthly to daily is usually a rounding error. If two accounts quote the same nominal rate and only differ in compounding schedule, don't expect the yield gap to be dramatic — check the nominal rate itself first.