FinanceCalcSavings & CD APY Calculator
Enter the rate the way the bank quoted it — as an APY or as a nominal APR — and see what the deposit actually earns. The tool converts the rate in both directions, shows the periodic rate it compounds with, and compares the same quoted rate across daily, monthly, quarterly, semi-annual and annual compounding. Everything recalculates as you type.
Compounding frequency at the rate you entered
How this is calculated
The whole point of this page is to keep the two ways of quoting a rate separate, and to use the one that can actually be compounded:
- The periodic rate is the n-th root of the APY, where n is the compounding periods per year. Dividing an APY by 12 or by 365 is the classic error: it treats an already-compounded rate as if it were a nominal one, so the money grows faster than any bank would pay it.
- Entering an APR — the periodic rate is simply APR ÷ n, and the APY is then derived from it with the formula above. That is the direction in which compounding frequency changes what you earn.
- Entering an APY — the periodic rate is the root above, and the nominal APR falls out of it. Frequency no longer changes the growth rate, because the APY already contains it.
- Deposits land monthly, so the monthly factor is the periodic rate carried to one month: (1 + periodic)n/12. Over twelve months that is exactly (1 + periodic)n — the APY — at any frequency.
- Timing — a deposit made at the start of a month earns that month's interest; one made at the end does not. Paying yourself on payday is worth slightly more, at no extra cost.
- Pre-tax, pre-fee — no tax, no account fee and no early-withdrawal charge is deducted from the headline. The CD penalty estimate further down is a separate calculation.
Interest is carried at full precision internally and rounded for display. A bank that rounds each crediting period to the cent will land a few dollars away over a long term — a difference in rounding, not in maths.
APY vs APR: the same rate, two different numbers
A bank can describe one account with two different percentages, and both can be true. The APR is the nominal annual rate — the headline number before the compounding inside the year is counted. The APY is what that rate actually pays over twelve months once the compounding is included. They are equal only when interest is compounded once a year.
Converting the two is the whole trick, and it goes both ways:
- APR → APY:
APY = (1 + APR ÷ n)n − 1, where n is the compounding periods per year. - APY → APR:
APR = n × ((1 + APY)1/n − 1).
Put a 4.25% rate through both directions. If 4.25% is the nominal APR, then compounding annually pays 4.2500% APY, compounding monthly pays 4.3338%, and compounding daily pays 4.3413% — the same 4.25% on the label, three different amounts of money. If 4.25% is the APY, then the nominal rate behind it is 4.2500% compounded annually but only 4.1624% compounded daily: 8.76 basis points that exist purely because of how often the interest is credited.
The error this calculator exists to avoid
Most quick calculators — and a surprising number of spreadsheets — take the APY, divide by twelve or by 365, and compound with that. It is wrong in a specific, measurable way: dividing treats a rate that has already been compounded as if it had not been, so the deposit grows as if it were earning a slightly higher nominal rate. Compounding a 4.25% APY daily that way produces an effective 4.3413% instead of 4.2500%, and on the defaults on this page it inflates the maturity value by about thirteen dollars over two years. The correct periodic rate is the n-th root, (1 + APY)1/n − 1, and it is the only rate on this page that touches the money.
How compounding frequency changes the answer
Compounding frequency is real, but it is the smallest of the three levers. The table above prices it exactly at the rate you entered: five accounts, the same quoted rate, five different schedules. At a 4.25% nominal APR, annual compounding pays over a two-year plan in the range of thirteen dollars less than daily compounding; over a thirty-year horizon the same gap compounds into a genuinely large sum, which is why the horizon matters more than the frequency.
Note the asymmetry, because it is the part that is usually blurred. Frequency changes what you earn only when the rate is quoted as a nominal APR. When the rate is quoted as an APY, the compounding is already inside the number by definition, so annual and daily compounding pay the same APY — what changes is the nominal rate the bank is entitled to advertise. Both readings are on the page: the chart's two rate lines carry the label side of the story, and the maturity column carries the money side.
How CDs are quoted — and what the early-withdrawal penalty costs
A certificate of deposit fixes both halves of the deal: a rate (quoted as an APY) and a term. The APY is locked for the term, so a CD protects you from a rate cut and locks you out of a rate rise. Savings accounts are the mirror image — a floating APY you can leave at any time, which is why a CD normally has to offer a little more to be worth the commitment.
The price of the commitment is the early-withdrawal penalty. US banks almost always express it as a number of months of interest rather than a flat fee — commonly three months on terms up to a year, and six or twelve months on longer terms — and it is charged against the interest credited so far. Two consequences follow:
- Withdrawing late in the term costs some of the interest you were going to earn, but leaves your principal whole.
- Withdrawing early in the term can cost more than the interest credited, in which case the bank takes the difference out of your principal. You open a CD with $5,000 and can close it with less.
That is why the practical rule is to fund a CD only with money you will not need — an emergency fund belongs in a savings account or a no-penalty CD, whatever the rate.
What this page does not know
The tool models one fixed rate held for one fixed term. Real accounts are messier, and these are the gaps:
- Rate changes. A savings APY moves whenever the bank or the market moves. Every figure here assumes the rate you typed applies for the whole term, which no savings account promises.
- Promotional and step rates. Teaser APYs often expire after a few months, and step-rate CDs pay different APYs in different years. Entering the average is a rough correction at best.
- Taxes. Interest is taxed as ordinary income as it is credited, not when you withdraw it, so a 4.25% APY can net out closer to 3% in a taxable account. The figures here are pre-tax — for a rough after-tax figure, subtract your marginal rate from the interest.
- Account rules. Minimum balances, monthly fees, withdrawal limits and the exact penalty formula all vary by bank. A fee can erase the difference between two apparently close APYs.
- Deposit insurance. FDIC cover is $250,000 per depositor, per bank, per ownership category. Past that, the extra money is uninsured credit risk — so a very large deposit may belong in more than one institution whatever the rate.
Frequently asked questions
Should I enter the APY or the APR?
Enter whichever one the bank told you, and set the toggle to match — that is why the toggle exists. If the account says "4.25% APY", enter 4.25 with the APY toggle on. If a page quotes a nominal rate and a compounding schedule, enter the rate with the APR toggle and pick the schedule. If you only have one number and no idea which it is, the APY is the one deposit accounts are required to disclose, so it is the safer assumption.
Why is the maturity value identical at every frequency when I enter an APY?
Because that is what an APY means. It is the effective annual rate with the compounding already included, so 4.25% a year stays 4.25% a year whether interest is credited daily or once. What the frequency changes is the nominal APR that produces it: 4.2500% with annual compounding, 4.1624% with daily compounding. Switch the toggle to a nominal APR and the frequency starts moving the balance instead.
How much does compounding frequency actually add?
Less than the marketing suggests at typical rates. Going from annual to daily compounding at a 4.25% nominal APR adds about 0.09 percentage points of effective yield — roughly thirteen dollars on a $5,000 deposit with monthly contributions over two years. Going from 4.25% to 4.45% APY adds several times more than that, and staying invested for another five years adds more again. Frequency is the third lever, not the first.
Is this the same as a compound interest calculator?
The growth maths is. The difference is what this page is built around: the compound interest calculator takes a nominal rate and a frequency and projects growth, while this page converts between the two ways a rate is quoted and prices the frequency itself. Use that one for long-horizon growth, and this one to work out what a quoted savings or CD rate actually pays.
Can I use this for a bond or a Treasury?
Partly. Bonds and Treasuries have their own conventions — semiannual coupons, reinvestment at unknown future rates, price changes before maturity — none of which a deposit model captures. It is a reasonable approximation for the coupon income on a bond held to maturity, and a poor one for anything you might sell early.
Does anything I type leave my device?
No. Every calculation runs in your browser, there is no server call, no account and no upload. The only third-party script on the page is the ad loader.