Apy Calculator Savings

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Savings APY Calculator

Annually (1/year) Semi-Annually (2/year) Quarterly (4/year) Monthly (12/year) Daily (365/year)
Effective APY
0.00%
Total Interest Earned
$0.00
Final Account Balance
$0.00
function calculateAPYSavings() { var principal = parseFloat(document.getElementById('initialDeposit').value); var apr = parseFloat(document.getElementById('nominalRate').value) / 100; var n = parseInt(document.getElementById('compoundingPeriod').value); var t = parseFloat(document.getElementById('investmentTerm').value); if (isNaN(principal) || isNaN(apr) || isNaN(t) || principal < 0) { alert("Please enter valid positive numbers for all fields."); return; } // APY Formula: (1 + r/n)^n – 1 var apy = Math.pow((1 + apr / n), n) – 1; // Compound Interest Formula: A = P(1 + r/n)^(nt) var finalBalance = principal * Math.pow((1 + apr / n), (n * t)); var totalInterest = finalBalance – principal; document.getElementById('apyDisplay').innerText = (apy * 100).toFixed(3) + "%"; document.getElementById('totalInterestDisplay').innerText = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('finalBalanceDisplay').innerText = "$" + finalBalance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('apyResults').style.display = 'block'; }

Understanding APY in Savings Accounts

Annual Percentage Yield (APY) represents the real rate of return on your savings when accounting for the effect of compound interest. Unlike a simple interest rate (APR), APY reflects how often your interest is calculated and added back to your balance, which then earns interest itself.

The Power of Compounding Frequency

The frequency with which interest is compounded makes a significant difference in your final balance. Most modern high-yield savings accounts (HYSA) compound interest daily or monthly. The more frequently interest is compounded, the higher your effective APY will be, even if the nominal rate remains the same.

Example Scenarios

  • Monthly Compounding: If you deposit $10,000 at a 4.00% nominal rate compounded monthly, your APY is 4.07%.
  • Daily Compounding: With the same $10,000 and 4.00% rate compounded daily, your APY increases to 4.08%.
  • Impact over Time: Over 10 years, daily compounding would yield significantly more interest than annual compounding on the same initial deposit.

APY vs. APR: What's the Difference?

While APR (Annual Percentage Rate) is typically used for loans and credit cards to show the cost of borrowing, APY is the standard for savings products to show the potential for growth. If a bank advertises a 5.00% APY, that is exactly what you will earn over one year. If they advertise a 5.00% interest rate, your actual yield (APY) will likely be higher due to compounding.

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