Calculate the growth of your capital based on current bank deposit rates.
Annually
Quarterly
Monthly
Daily
Projected Balance
Total Yield Earned
Effective APY
Understanding Bank Rates and APY
Bank rates determine how much a financial institution pays you for holding your capital in their accounts. Unlike a loan, where you pay the bank, a deposit account generates a yield for the account holder. To accurately forecast your savings growth, you must look at the Annual Percentage Yield (APY), which accounts for the effect of compounding.
The Importance of Compounding Frequency
The rate at which your earnings are reinvested back into the principal is known as the compounding cycle. Most high-yield savings accounts and certificates of deposit (CDs) use monthly or daily compounding. The more frequently a bank compounds the rate, the higher your total return will be over time.
Example Calculation
If you place 10,000 into a high-yield account with a 4.00% APY compounded monthly for 3 years:
Initial Capital: 10,000
Bank Rate: 4.00%
Compounding: 12 times per year
Resulting Balance: 11,272.71
Total Yield: 1,272.71
Factors Influencing Current Bank Rates
Market rates fluctuate based on several economic indicators:
Central Bank Policy: When the federal reserve adjusts the target federal funds rate, retail bank rates typically follow.
Inflation: Banks often raise rates to remain competitive during periods of high inflation.
Liquidity Needs: Banks may offer higher rates on CDs to attract more deposits when they need to increase their lending capital.
function calculateBankYield() {
var principal = parseFloat(document.getElementById("initialDeposit").value);
var annualRate = parseFloat(document.getElementById("bankRate").value);
var frequency = parseInt(document.getElementById("compoundingFrequency").value);
var time = parseFloat(document.getElementById("termDuration").value);
if (isNaN(principal) || isNaN(annualRate) || isNaN(time) || principal <= 0 || annualRate < 0 || time <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
var decimalRate = annualRate / 100;
// Formula: A = P(1 + r/n)^(nt)
var amount = principal * Math.pow((1 + (decimalRate / frequency)), (frequency * time));
var totalYield = amount – principal;
// Formatting numbers for display
var formattedBalance = amount.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedYield = totalYield.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
// Effective Yield Calculation (Actual APY considering compounding)
var effectiveAPY = (Math.pow((1 + (decimalRate / frequency)), frequency) – 1) * 100;
document.getElementById("totalBalanceDisplay").innerText = formattedBalance;
document.getElementById("totalYieldDisplay").innerText = "+" + formattedYield;
document.getElementById("effectiveRateDisplay").innerText = effectiveAPY.toFixed(3) + "%";
document.getElementById("resultsArea").style.display = "block";
// Smooth scroll to result
document.getElementById("resultsArea").scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}