APY Interest Calculator

Calculate how much interest you can earn on your money with our APY Interest Calculator.¹

Initial Deposit $

APR (Annual Percentage Rate)

APY (Annual Percentage Yield)

Months

Compounding

Monthly Deposits $

Ending Balance

Ever wondered how much your hard-earned savings could actually grow over time? It's not just about the amount you deposit, but also the magic of compound interest. This is where the APY Calculator becomes your powerful ally.

This article will guide you through the world of APY calculators, explaining how they work and how you can leverage them to make informed decisions about your savings goals.

What is an APY Calculator?

An APY (Annual Percentage Yield) calculator is a free online tool that helps you estimate the potential growth of your savings over a specific period. It factors in the initial deposit (principal amount), the annual interest rate (APR), and the compounding frequency to provide you with a more accurate picture of your returns compared to a simple interest calculation.

Here's a breakdown of the key terms:

Principal Amount: The initial amount of money you deposit in your savings account, certificate of deposit (CD), or other interest-bearing account.
Annual Percentage Rate (APR): The interest rate offered by the financial institution on your savings account, expressed as a yearly percentage.
Compounding Frequency: How often the interest earned on your savings is added back to the principal amount, effectively earning interest on the interest. More frequent compounding results in faster growth.

How Does an APY Calculator Work?

The APY calculator utilizes a mathematical formula that takes into account the factors mentioned above:

APY = (1 + r / n)^n - 1

Where:

APY: The Annual Percentage Yield (the number you're looking for)
r: The annual interest rate (APR) expressed as a decimal (e.g., 2% = 0.02)
n: The number of compounding periods per year

Let's break it down with an example:

Imagine you deposit $1,000 into a savings account with a 2% APR that compounds monthly (n = 12). Using the formula:

APY = (1 + 0.02 / 12)^12 - 1
APY = 0.0201 (rounded to four decimal places)
APY = 2.01%

This means that with monthly compounding, your money earns slightly more interest than the advertised 2% APR. Over time, this seemingly small difference can significantly impact your total returns.

Important Note: The APY calculator provides an estimate based on the information you input. Actual returns may vary depending on factors like bank fees or changes in interest rates.

Why Use an APY Calculator?

Here are some compelling reasons to make the APY calculator your go-to tool for financial planning:

Compare Savings Options: Use the calculator to compare APY rates offered by different banks and financial institutions for your savings accounts or CDs. This helps you choose the option that maximizes your returns.
Set Savings Goals: Plan your savings strategy by estimating how much you need to save regularly to reach your desired financial goals within a specific timeframe.
Visualize the Power of Compounding: See the impact of compounding frequency firsthand. Even small increases in compounding frequency can significantly boost your returns in the long run.
Make Informed Decisions: The APY calculator empowers you to make well-informed decisions about your savings options and investment strategies.

How to use the APY Calculator?

Access the Calculator: Visit the Axos Bank APY Calculator page: https://gocalcu.com/

Input Your Principal Amount: Look for the field labeled "Initial Deposit" or "Principal Amount." Enter the amount you plan to deposit in your Bank account.

Explore Interest Rates (Optional): Go Calculator doesn't seem to have the option to directly choose an interest rate on the APY calculator page. However, you can likely find information about the APYs offered on their different account types on the Bank website.

Choose a Timeframe (Optional): While the Go calculator doesn't offer a specific field for the timeframe, the displayed APY is likely an annual figure. Keep this timeframe in mind when interpreting your results.

Review Results: Once you've entered your principal amount (and considered the interest rate offered by the account you're interested in), the calculator will automatically display the estimated APY. This tells you how much your initial deposit could potentially grow over a year, taking into account compounding interest.