Calculator
APY: what your savings rate really earns
Turn a quoted rate into the yield you actually get after compounding, and see what a deposit grows to, before and after tax.
Data last checked . Every source is listed below.
The yield you really earn in a year (APY)
$15,000 grows to $16,912 in 3 years, earning $1,912.
Where it goes
- Your deposit$15,00089%
- Interest earned$1,91211%
- The rate you entered
- 4%added daily
- What you end up with
- $16,912
- Interest earned
- $1,912
- Extra earned by compounding
- $112compared with interest that is never added to the balance
Adding interest once a year instead of daily would cost you $39 over 3 years, while a rate one point higher would earn $515 more. The rate matters far more than how often it is added.
For information only: not advice, a recommendation or an offer. We take care, but our sources can lag and so can we, so a figure may be out of date. Official figures come from lenders, plans, the IRS or Social Security.
What moves the number
The few things that change the answer the most, in plain terms.
- The rate itself
- Almost all of the difference between two accounts is the rate. A full point of rate usually changes the result more than how often interest is added.
- How often interest is added
- Daily beats yearly, but on ordinary savings rates the gap is small. It matters more at high rates and over long periods.
- Time
- Interest earns interest. The longer money stays, the more of your balance comes from compounding.
- Adding money
- Regular deposits often matter more than the rate over a few years.
- Taxes
- Interest is taxed as ordinary income in the year it is paid. Your bracket decides how much of it you keep.
The working
Step by step, with the numbers from the starting example, so you can check it on paper.
- The bank quotes 4% a year and adds interest daily, so each of the 365 periods in a year earns 0.0110%.
- Over one year, a dollar grows by a factor of (1 + 4% ÷ 365) to the power 365. That is 1.04081, so the APY is 4.081%.
- Federal rules (Regulation DD) define APY the same way: the interest actually earned in a year, divided by the deposit.
- Month by month, the balance grows by the monthly share of that yield.
- After 3 years the balance is $16,912: $15,000 you put in plus $1,912 of interest.
- We left tax out. Turn it on under More options to see what you keep.
Try a different case
Each opens the calculator with the numbers filled in.
What we assumed
Where a number is an example, we say so.
- Checked sourceAPY is the interest earned over a year divided by the deposit. Federal rules (Regulation DD, Appendix A) tell banks to calculate it from the actual interest earned over the term.
- Our estimateThe rate stays the same for the whole period. Savings and money market rates usually change; a certificate of deposit locks its rate for the term.
- Our estimateMonthly deposits land at the end of each month.
- Our estimateTax is a simple percentage of all interest. State and local tax and the net investment tax are not included.
- Our estimateBank-specific rules, such as minimum balances, fees or tiered rates, can change what you earn.
Sources
- Checked sourceConsumer Financial Protection Bureau, Regulation DD (Truth in Savings), Appendix A to Part 1030, "Annual Percentage Yield Calculation": APY = 100[(1 + Interest/Principal)^(365/days in term) − 1]. Data year 2026, checked 2026-11-04.