Why does APY (Annual Percentage Yield) matter?

Understanding APY (Annual Percentage Yield) helps you make better financial decisions.

Glossary · Banking

APY (Annual Percentage Yield)

Definition

APY is the total amount of interest earned on a deposit over one year, including compound interest.

Formula

APY = (1 + r/n)^n - 1

APY calculator

Stated rate (APR)

Compounds per year

Deposit amount

5.116%

APY

$512

Interest earned (1 yr)

$10,512

Balance after 1 yr

APY is the total amount of interest earned on a deposit over one year, including compound interest.

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