CD APY Calculator
Calculate the APY (Annual Percentage Yield) on your certificate of deposit. Convert APR to APY and understand the true return on your CD investment.
CD Details
APR vs APY Comparison
Difference: APY is 0.13% higher than APR due to compounding.
APY by Compounding Frequency
Bank APY Comparison
Note: This shows how different APY rates affect your earnings. Always compare APY when shopping for CDs.
What is APY on a CD?
APY (Annual Percentage Yield) is the true annual rate of return you'll earn on your certificate of deposit, accounting for compound interest. Unlike APR, APY includes the effect of compounding frequency, giving you the actual return.
Our CD APY calculator converts APR to APY and shows you exactly how much you'll earn based on the true yield.
APY vs APR: Key Differences
APR (Annual Percentage Rate)
- Nominal interest rate
- Doesn't include compounding
- Lower than APY
- Simple calculation
APY (Annual Percentage Yield)
- True annual return
- Includes compounding effects
- Equal to or higher than APR
- Actual earnings rate
Always compare CDs using APY, not APR, to get accurate comparisons. Our CD APY calculator makes this conversion easy.
How Compounding Affects APY
Compounding frequency directly impacts APY. The more frequently interest compounds, the higher the APY:
Example: 5% APR
- Daily compounding: 5.13% APY
- Monthly compounding: 5.12% APY
- Quarterly compounding: 5.09% APY
- Annual compounding: 5.00% APY
Use our CD APY calculator to see how different compounding frequencies affect your APY and total earnings.
Why APY Matters for CD Investors
APY is crucial for CD investors because:
- Accurate Comparisons: APY allows you to compare CDs from different banks fairly
- True Returns: APY shows the actual return you'll earn, not just the nominal rate
- Compounding Impact: APY reveals how compounding frequency affects your earnings
- Legal Requirement: Banks must disclose APY, making it the standard for comparison
Always use our CD APY calculator to convert APR to APY before making investment decisions.
How to Compare CD APY Offers
1. Use APY, Not APR
Always compare CDs using APY. Two CDs with the same APR but different compounding frequencies will have different APYs.
2. Consider All Factors
APY is important, but also consider term length, minimum deposit, and early withdrawal penalties.
3. Shop Around
APY rates vary significantly between banks. Online banks often offer higher APYs than traditional banks.
4. Use Our Calculator
Our CD APY calculator helps you convert APR to APY and see actual earnings for different scenarios.