APY Calculator
Calculate the Annual Percentage Yield (APY) based on your nominal interest rate and compounding frequency to accurately compare savings accounts, FDs, and investments.
How to use the APY Calculator
- Enter the nominal (stated) interest rate.
- Choose the compounding frequency.
- Optionally enter your deposit amount.
- Click Calculate to see the APY and yearly earnings.
Formula used
Worked example
7% nominal rate
Quarterly compounding: APY = 7.19%
Monthly compounding: APY = 7.23%
Daily compounding: APY = 7.25%
On ₹1,00,000, quarterly compounding earns about ₹7,186 in a year
APY vs APR and Indian deposits
The stated rate (APR or nominal rate) ignores compounding; APY shows what you actually earn in a year. Most Indian bank fixed deposits compound quarterly, so a 7% FD effectively yields about 7.19%. Savings accounts calculate interest daily but usually credit it quarterly. When comparing deposits, compare APY (often shown as "effective annual yield") rather than headline rates.
Tips for accurate results
- More frequent compounding gives a higher APY, but the difference is small.
- Interest on FDs is taxable at your slab rate, which lowers the real yield.
- Check whether a deposit pays out interest (no compounding) or reinvests it.
Frequently Asked Questions
Annual percentage yield: the real yearly return including compounding.
Yes, whenever interest compounds more than once a year.
Most banks compound quarterly.
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Content reviewed by Vinod, Easy Smart Calculator · Last updated October 2026
Frequently Asked Questions
What is the difference between APY and interest rate?
The nominal interest rate doesn't account for compounding within the year, while APY reflects the actual annual return including the effect of compounding frequency.
Does more frequent compounding always mean higher APY?
Yes, for the same nominal rate, more frequent compounding (daily vs annually) results in a slightly higher APY due to interest earning interest more often.
Why should I compare APY instead of interest rate?
APY gives you the true annual return, making it the fairest way to compare savings accounts or deposits that compound at different frequencies.