What does APY mean?

APY is the annual percent yield that reflects compounding on interest. It reflects the actual interest rate you earn on an investment because it considers the interest you make on your interest. Consider the example above where the $100 investment yields 5% compounded quarterly.

What is 2% APY?

2% APY refers to the annual percentage yield (or interest) that a bank is willing to pay you to maintain your deposit. It works by compounding the interest applied to your deposit over an agreed-upon time period, which can be daily, weekly, monthly, quarterly, or annually.

What is annual interest yield (APY)?

Annual interest yield (APY) is a measurement that can be used to check which deposit account is the most profitable or whether an investment will yield a good return. You can also use it in reverse; you can find the interest rate with a given compound frequency if you know what the annual percentage yield is.

How does the APY calculator work?

How does this APY calculator work? The APY Calculator is a tool that enables you to calculate the actual interest earned on an investment over a year. Annual interest yield (APY) is a measurement that can be used to check which deposit account is the most profitable or whether an investment will yield a good return.