All termsGlossary
What is an APY?
APY (annual percentage yield)
APY stands for annual percentage yield. It's what a rate really adds up to over a full year, counting compounding (definition, opens in a new tab): interest (definition, opens in a new tab) earning, or charging, interest of its own. Banks quote APY on savings. Turning any rate into an APY lets two offers be compared like for like, even when they compound differently.
Example
A 9% APR (definition, opens in a new tab) car loan charged monthly works out to 9.38% APY.
Where does this site use it?
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- Compound interest calculator
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General education, not financial advice.