You may notice if you’re shopping for a savings account that banks advertise both an interest rate and an annual percentage rate, or APY.

APY, or annual percentage yield, is how much money a bank account earns in a year, including compound interest. Learn more about what APY means for your accounts.

How to calculate APY Here’s the basic formula you can use to calculate APY: APY = (1+r/n)n – 1 Notes: “R” is the interest rate, while “N” is the number of compounding periods.

APY, or annual percentage yield, is an essential factor when choosing a savings account, as it considers compound interest and helps maximize your savings over time.

Understanding APY and compound interest plays a key role in securing your financial future.

What is APY? Learn more about annual percentage yields and how this tool can help you understand the potential return on investment.