APY guide: nominal vs. effective with tables

A 6 percent account compounding monthly pays 6.168 percent a year - the frequency hides free money inside nominals. APY (annual percentage yield) exposes it: the one number ranking every savings offer, and the mirror of APR on loans. This guide covers the conversion math both directions, real-vs-nominal yields, teaser and bonus traps, where to park every windfall from tax refunds to house proceeds, and the taxes on it all. Because banks advertise nominals, but wealth compounds effective. Frequency silently donates basis points to patient savers - and APY is the receipt.

How to use the APY / Effective Rate Calculator

Enter the nominal rate above.
Set compounding periods per year.
Compare APYs across offers.

Formula

APY = (1 + r/n)^n − 1 · back: nominal = n × ((1 + APY)^(1/n) − 1)

Key concepts, explained

Nominal vs. APY: the core

Nominal states rates before compounding; APY states true yearly growth including it. Six percent monthly is 6.168 effective - frequency hides free money. Compare APYs, never nominals.

Backwards via tool mode: nominal = n × ((1 + APY)^(1/n) − 1). Grids checked, conversions trusted.

Frequency math at 6 percent

Yearly 6.000, quarterly 6.136, monthly 6.168, daily 6.183: gaps measured in basis points, not points. Big balances make basis points matter; small ones do not.

Continuous (e^r − 1) caps theory - daily reaches 99.99 percent of it. Chase levels, not frequencies.

Compare HYSAs by APY only

Rank savings by APY alone - frequency already inside. Minimums, fees, and transfer speeds break APY ties. Screenshot offer APYs with dates for disputes.

Teaser APYs ranked over true holding periods. Rankings checked yearly (banks move quietly).

Compare CD ladders per rung

Auto-rolling maturities = permanent short rates plus weekly liquidity. Compare APYs per rung; maturities staggered. Penalties modeled per rung.

Callable premiums weighed against call risks. Ladders beat lump timing.

Fed cycle: savings follow

Fed funds anchor deposit rates with lags: hiking phases reward locking long, cutting phases reward flexibility. Track meeting calendars; banks move weeks after.

High phases lock years, easing stays liquid. Terms tracked, cycles timed.

Annualize teaser rates

Rank post-teaser APYs over true holding periods. Four-month guarantees typical; revert rates decide. Terms read before chasing.

Blended first-year math computed honestly. Teasers ranked, revert rates verified.

Bonuses beat rates (small balances!)

$200 bonuses on $8,000 beat 0.5-point gaps for years - small balances chase bonuses, big balances chase rates. Requirements (direct deposits, debits!) costed.

Bonus hopping calendared; household limits respected. Bonuses taxed as interest - still usually worth it.

Taxes on interest

1099-INT reports every $10+; brackets tax interest as ordinary income. After-tax APYs computed with marginal rates (Treasuries skip state tax!). Municipal bonds exempt federally (sometimes states!).

Withholding backup 24 percent without TINs. Quarterly estimates on big interest. Net APYs compared.

Real yields: APY minus inflation

Nominal minus inflation effects - the only number growing wealth. 4.6 percent APY at 3.2 inflation ≈ 1.36 real: slow growth - fine for emergency funds, not 30-year wealth.

TIPS and I-bonds guarantee real legs. Real ranked, nominal ignored.

Overdraft APR: 11 nominal ≈ 11.6 effective

Daily periodic rates applied to daily balances make effective exceed nominal. Courtesy fees dwarf rate gaps. Linked savings cheapest.

Continuous disclosure (statements!) bury true costs; APYs expose them. Opt out, link up.

Cards effectively 28 percent

Quoted nominal converts with daily compounding plus fees: 24.99 percent nominal ≈ 28 effective. Minimum-payment traps stretch $5,000 over 5 years (+$3,900 interest!). Double payments halve time.

Grace periods beat formulas (pay in full!). Balance-transfer fees annualized first.

Installment APR effective vs. nominal

Add-on and precomputed quotes converted to true APRs for comparison with fixed offers. Score-based tiers priced; fees folded. Terms matched to horizons.

Rule-of-78 loans converted cautiously. Prepayment rights verified.

Mortgage APR (closing, points!)

Points break-even horizons: $3,000 points on $300k at 6.5 vs. 6.25 + savings ≈ $50/month; break-even 60 months. Staying 10 years: +$3,000 net. Moving in 3: −$1,200.

Closing costs, PMI, and servicing folded. Lender credits versus points modeled. Horizons decide.

401(k) loan effective costs (fees!)

Origination fees plus lost compounding plus double taxation on interest - true costs exceed stated rates. Separation accelerates bills (60-90 days!). Suspended matches bleed.

Hardship alternatives weighed. True costs computed, borrowing minimized.

Savings bonds and CDs effective

I-bond composite rates (fixed + inflation!) reset semi-annually; EE doubles in 20 years. Early-withdrawal penalties (3-month interest!) netted. Purchase caps ($10k electronic + $5k paper!).

TreasuryDirect logistics learned once. Ladders beat timing.

Bond yields (prices!)

Prices fall (duration × change); new buyers earn more henceforth. Yield-to-maturity totals holding to redemption - APY cousins for bonds. Funds never mature (duration managed!).

Premium/discount amortization taxed yearly. Ladders individualize control.

Dividend yields gross

Qualified rates (0/15/20!) versus ordinary on REITs/MLPs. Payout ratios gate safety (over 80% flagged!). Growth beats yield long-term mostly.

DRIPs compound automatically (discounts sometimes!). Withholding foreign reclaimed via credits.

Rental yields: rent through price

Cap rates (NOI ÷ price!) compare properties; 1-percent rules screen monthly. Expenses (vacancy, repairs, management!) netted. Leverage magnifies cash-on-cash both ways.

Depreciation (27.5 years!) shelters income. Markets cycled; rents sticky.

HYSA hopping: switch bonuses

New-account bonuses ($200-500!) dwarf rate gaps on small balances. Requirements priced (direct deposits!). Household and lifetime limits respected.

Bonus calendars run; referrals stacked. Taxed as interest regardless. Hop yearly, track requirements.

Comparison sites: filter effective

Bankrate and DepositAccounts filtered by APY, minimums, fees - sponsored placements discounted. Reviews scanned for transfer horror stories. Rate histories checked (teaser patterns!).

Credit-union access rules verified. Fine print read before moving money.

Rate guarantees: months typical

Four-month guarantees typical; revert rates decide value. Grandfathered tiers honored until changed. Promotional windows calendared with alerts.

Negotiated retention offers beat advertised (ask!). Guarantees screenshotted.

FDIC insurance $250k

Per depositor per bank per ownership category: joint doubles, trusts multiply. Sweep networks split millions across partner banks (each under $250k insured!). Brokered deposits pass through (records!).

NCUA mirrors for credit unions. Titling reviewed yearly. Insure fully, title carefully.

Account fees vs. interest

Monthly fees ($5-15!) devour small-balance interest; waivers via direct deposit or minimums. Overdraft programs ($35!) dwarf yields. Fee-free online banks compared.

ATM networks priced (rebates valued!). Minimums modeled against interest. Fees killed first.

ESPP effective (discounts!)

Fifteen-percent discounts with lookbacks compound (two offerings yearly!): max contributions, sell promptly, diversify. Disqualifying dispositions taxed ordinary (holding periods!).

Concentration capped (10-15% of pay!). Enrollment windows calendared. Maximize, sell, diversify.

401(k) match: instant 50-100 percent

Fifty-to-hundred percent matches to 3-6 percent of pay: instant returns funding cannot beat. Vesting cliffs/graded gate quitting costs. True-ups rescue late starters.

Roth versus traditional split by brackets. Auto-escalation yearly. Capture full match always.

IRA effective (credits!)

Saver credits (10-50% to $2k!) stack for low earners; deductions phase out by income and coverage. Backdoor Roths serve high earners. Spousal IRAs double rooms.

Deadlines (tax day!) calendared; recharacterizations gone. Credits claimed, rooms filled.

Inflation eats nominal

Cash below inflation guarantees certified purchasing-power loss. TIPS ladders and I-bonds insure legs. Equities outrun over decades.

Bracket creep taxes nominal gains (inflation phantom income!). Real assets diversified.

Tax deferral compounding

Pre-tax 401(k)/IRA/HSA dollars compound gross for decades; Roths compound tax-free forever. Deferral values rise with brackets and time. RMDs force pre-tax eventually.

Asset location optimized (bonds pre-tax, stocks Roth!). Conversions in low years. Defer high, convert low.

Withdrawal APY: 4 percent real

Four-percent inflation-adjusted withdrawals held 30 years historically; guardrails extend. Sequence risk buffered with cash buckets. RMDs override plans at 73.

Dynamic rules (Guyton-Klinger!) adjust to markets. Essential/discretionary split first.

Card compound traps

Daily compounding plus fees plus penalty APRs (29.99%!) snowball minimum payers. Cash advances (no grace, upfront fees!) worst. Balance-transfer arbitrage timed.

Autopay full set; utilization managed under 30 percent (10 ideal!). Traps dodged by automation.

0-percent installment checks

Deferred-interest clones bill retroactively on misses - payoff calendared two months early. True 0 percent (subsidized!) distinguished. Minimums never clear promos.

Price markups versus cash compared. Terms read before signing.

Total deposit comparisons

APY plus fees plus access plus insurance compared as bundles. Teaser blends annualized. Switching bonuses netted after taxes.

Household aggregation (relationship rates!) asked. Total compared, bundles ranked.

Fed funds: the anchor

Overnight bank lending sets prime (fed + 3!) and ripples to deposits with lags. Meeting calendars tracked; dot plots parsed. Banks move weeks after.

Reverse repo drains/balances signaled. Cycles timed, locks matched.

Existing-customer trap: 0.5 vs. 4 percent

Legacy savings languish at 0.5 while new money earns 4 - banks move quietly. Annual ranking audits catch drift. Retention offers negotiated with competitor screenshots.

Automatic transfers to high-yield set. Loyalty unpriced is donation.

CD auto-rollover: trap and blessing

Auto-renewals lock at then-current (often lower!) rates; grace windows (7-10 days!) allow exits. Ladder automation versus rate vigilance traded.

No-rollover instructions set per rung. Maturity calendars shared. Automate deliberately.

Breaking CDs: costly, rarely possible

Early-withdrawal penalties (3-12 months interest!) destroy yields; partial breaks sometimes allowed. No-penalty CDs bridge (0.4 over savings!). Hardship exceptions narrow.

Ladder rungs sized to needs. Penalties modeled before locking.

Mixing bonds in ladders

Short Treasuries and TIPS between CD rungs diversify issuers; duration matched to spending years. Funds for convenience, individuals for control.

Rate cycles exploited: lock long high, stay short low. Mixes reviewed yearly.

Savings plans + HYSA: the duo

Auto-transfers payday-morning plus top-APY parking: contributions grow, balances earn. Escalation yearly (+1 point!). Separate banks for friction (impulse protection!).

Windfalls routed by rule (half invest, quarter fun, quarter cushion!). Duo automated, forgotten profitably.

Emergency tiers: 3 buckets

One month instant HYSA (debit!), 2-5 months no-penalty CDs/T-bills, beyond invested conservatively. Tiers matched to job risk (freelancers deeper!). Refilled after draws immediately.

Credit lines as tier four (never tier one!). Tiers labeled, automation split.

Sinking funds: lump reserves

Monthly slices for lumpy bills (insurance, property tax, holidays!) - reverse budgeting. Separate HYSA buckets labeled per goal. Annual totals divided by twelve automated.

Shortfalls borrowed from fun, never emergency tiers. Slices automated, labels literal.

Parking holiday bonuses (not splurging!)

Year-end cash routed by rule before lifestyle smells it: debts, tiers, then fun. Bonus withholding (22%!) reconciled at filing. Lifestyle upgrades funded from raises, never bonuses.

Employer stock bonuses sold promptly (concentration!). Rules written pre-December.

Parking tax refunds

Refunds are interest-free loans recalled: adjust W-4 to shrink them (monthly raises!). Parked refunds split by rule (half debt, half goals!). Filing early speeds refunds.

Big refunds flag broken withholding - fix, do not celebrate. Adjust, split, file early.

Parking bonuses and severance

Lump sums parked in HYSAs while deciding (6-month rules!): severance covers 3-6 months spending first. COBRA premiums budgeted ($600-2,000/month!). Job-hunt timelines set.

Retention bonuses (stay-through dates!) calendared. Severance negotiated (weeks per year!). Park, budget, hunt.

Windfalls: 6-month rule

Inheritances parked six months (HYSA!), debts over 7 percent killed, rest per written policy - never emotionally. Estate attorneys before distributions. Cooling protects from yourself.

Lump investing versus DCA decided by policy. Windfall taxes modeled (estate, income!). Park, kill, deploy.

Parking house-sale proceeds

Proceeds split by next-home timelines: imminent closings in HYSAs (safety!), year-plus horizons in T-bills/CDs. Capital-gains exclusions ($250k/$500k!) verified with residency math.

1031 exchanges defer investment-property gains (strict timelines!). Bridge costs budgeted. Split by dates, verify exclusions.

Child credits into 529s (18 years!)

Child Tax Credits ($2,000!) routed to 529s compound tax-free for education: 18-year horizons turn $2k yearly into ~$70k at 7 percent. State deductions stacked where offered.

Beneficiaries switched among siblings freely. K-12 and Roth rollovers ($35k lifetime!) add flexibility. Route yearly, stack states.

Custodial vs. HYSA for kids

UTMA/UGMA accounts (first $1,300 unearned untaxed, next $1,300 child rates!) beat HYSAs for long horizons; kiddie-tax thresholds watched. Control transfers at majority (18-21!). 529s better for education-only.

Allowances split (spend/save/give jars!). Teen Roths with earned income (lifetime head start!).

Intern paychecks parked (first jobs!)

First paychecks split (half save, half spend!) build lifelong ratios. Roth IRAs opened with any earned income ($7k rooms!). Direct deposits split automatically.

W-4s filed correctly (exempt claims avoided!). Emergency $500 first, then invest. Ratios set early.

Kid accounts: mini rates, maxi lessons

Youth savings pay pennies but teach statements, goals, and patience - lessons compound longer than interest. Matching parental contributions (50 cents/dollar!) motivate.

Chore commissions over allowances (work-pay links!). Teen checking with guardrails graduates. Lessons first, rates later.

ESPP payout: what then?

Post-purchase: sell promptly (concentration!), diversify proceeds, re-enroll next period. Holding periods weighed (tax vs. risk!). Contribution rates reset yearly.

Lookback gains banked, never worshipped. Next enrollment calendared. Sell, diversify, re-enroll.

401(k) balances: allocate or sit?

Old 401(k)s rolled to IRAs (choices + control!) or kept (creditor protection, stable value!). Consolidation simplifies rebalancing. Fees compared (plan admin costs!).

NUA on company stock evaluated (lump-sum rules!). Beneficiaries updated post-job. Consolidate deliberately.

Pension payouts: annuity or lump?

Monthly annuities insure longevity; lumps invest flexibly - breakeven math at life expectancy plus health. Survivor options priced (100%/75%/50%!). Lump rollovers to IRAs preserve control.

PBGC caps checked (underfunded plans!). Inflation erodes fixed annuities. Model both, health-weighted.

HSA payouts: reimburse anytime

HSA receipts saved decades, reimbursed anytime tax-free (ultimate retirement hack!): invest HSAs (not cash!), pay medical out-of-pocket, let compound. Contribution caps ($4,150/$8,300!) filled.

Medicare enrollment stops contributions (not withdrawals!). Beneficiary rules favorable. Save receipts, invest balances.

Parking severance smartly

Severance lumped in HYSAs covering 6-month horizons; COBRA versus marketplace compared ($$$!). Unemployment filed regardless (offsets vary!). Job-search budgets set.

Non-competes reviewed (garden leave paid?). References secured before exit. Park, compare, file.

HYSA taxes: $10,000 example

$10,000 at 4 percent = $400 interest: without withholding ~$96 federal at 24 percent, with planning $0 timing differences - forms! State taxes added. Brackets applied marginally.

Multiple 1099s aggregated. Estimates paid quarterly. Forms filed, brackets applied.

CD taxes: $50,000 example

$50,000 over 3 years at 3.5 percent = $5,250 interest: taxes ~$1,260, net 2.58 percent effective. Accrued annually (phantom income before maturity!). Early-break adjustments.

State-exempt alternatives compared (Treasuries!). Net effective ranked.

Rental depreciation: 27.5 years

Residential rentals depreciate over 27.5 years (land excluded!): $275k buildings shelter $10k yearly. Cost segregation accelerates (5/7/15-year buckets!). Recapture taxed at 25 percent on sale.

Passive-loss limits ($25k, phaseouts!). 1031 defers everything. Depreciate, segregate, exchange.

Solar taxes: credits not hobbies

Thirty-percent ITC credits (residential + commercial!) with step-down schedules; depreciation stacks commercially. Net-metering rules state-variable. Basis reduced by half the credit (commercial!).

Recapture on early sales (5-year vesting!). Leases versus ownership modeled. Credit, depreciate, meter.

Crypto taxes: 1-year holding

Sales after 1 year tax-free long-term (0/15/20!); under a year ordinary income over thresholds. Staking/mining ordinary on receipt. Every trade tracked (cost basis!).

Wash-sale rules (currently absent for crypto - harvest freely, laws pending!). Exchanges report (1099s!). Hold years, track everything.

Gold taxes: 28 percent collectibles

Physical gold after 1 year: 28 percent collectibles rate (not 20!). Silver starts 19 percent VAT-style premiums underwater. ETFs structured variously (grantor trusts!).

Dealers report large cash ($10k Form 8300!). State sales taxes vary. Hold years, mind structures.

Classics, watches, art: gains taxed

Collectibles at 28 percent long-term; short-term ordinary. Provenance documented (purchase records!). Insurance appraised yearly. Auction fees (15-25%!) netted.

Estate step-ups erase gains (hold-to-death strategies!). Fractional platforms vetted. Document, insure, time sales.

Drawdown plans: systematic withdrawals

Guardrailed percentages beat fixed dollars: prosperity raises, crashes cut - portfolios survive decades longer. Tax-bracket topping (Roth conversions!) layered. RMDs integrated from 73.

Cash wedges (2-year spending!) buffer sequence risk. Plans reviewed yearly. Systematize, guardrail, convert.

Fund payouts: withdrawal order

Taxable first, pre-tax staged, Roth last - bracket planning yearly. RMDs force pre-tax eventually. QCDs satisfy RMDs charitably from 70.5.

State taxes modeled (relocation arbitrage!). Heir brackets considered (stretch gone!). Order, convert, donate.

401(k) returns: example math

Max contributions plus matches compound: $23k yearly at 7 percent over 30 years ≈ $2.2M (matches add ~$200k!). Fees (1% vs. 0.1%!) decide six figures. Catch-ups at 50+ ($7,500!) accelerate.

Allocations age-glidpathed. Loans avoided. Contribute max, minimize fees.

HYSA taxes: split 1099s

Multiple banks mean multiple 1099-INTs aggregated; $10+ thresholds each. Nominee distributions documented. State additions summed.

Estimates adjusted per quarter. Aggregation automated via software. Collect, aggregate, estimate.

Foreign accounts: FBAR/FATCA

FBAR over $10k aggregate (FinCEN, April auto-extension!); FATCA Form 8938 higher thresholds. Penalties brutal (willful $100k+!). PFIC funds punished (excess distributions!).

Treaty positions disclosed. Streamlined procedures fix delinquents. Report everything, annually.

CD ladder example $60,000

Six $10k rungs (6/12/18/24/30/36 months): maturing rungs rolled to 3-year tops. Blended yields computed; penalties modeled. Quarterly reviews.

Rate environments shift allocations. Rungs sized to spending years. Ladder, roll, review.

Comparison sites done right

Filter APY/minimums/fees; discount sponsored placements; scan reviews for transfer traps. Histories checked for teaser patterns. Fine print read pre-move.

Direct-bank chats confirm rates (screenshots!). Test transfers small first. Filter, verify, test.

Rate chasing: moving to online banks

Online banks pay 1-2 points over branches (no branches!). Transfers tested small; direct deposits rerouted. Old accounts kept minimal (credit history!).

Switching bonuses stacked with rates. Beneficiaries re-titled. Move deliberately, keep anchors.

Pausing contributions: costs and timing

Paused matches forfeited (50-100% instant returns lost!); compounding gaps never return. Hardship pauses beat loan raids. Resumed automatically (calendar!).

Emergency tiers cover gaps first. Pauses dated, resumes automated.

Interest and divorce: QDROs

QDROs split 401(k)s/pensions tax-free incident to divorce (plan administrators pre-approve!). IRAs split by decree (trustee transfers!). Interim support calendared.

Beneficiaries updated post-decree (ex-spouses linger!). Refinances remove names. QDRO early, update all.

Estate accounts: holds and transfers

POD/TOD designations bypass probate (banks/brokerages!); joint titling scrutinized. Estate EINs obtained (IRS online!). Creditor claims noticed.

Small-estate affidavits under thresholds. Probate timelines (6-18 months!) planned. Designate, file, wait.

Compounding accounts: monthly crediting

Monthly-credited accounts beat annual-credited at equal nominals - APYs compared, not nominals. Statements bury crediting; APYs expose true yields.

Tiered rates (balances!) modeled marginally. Bonuses netted after taxes. Compare APY, mind tiers.

CD renewals: mind deadlines

Maturity plus 7-10 day grace to object - alarms BEFORE maturity, rates negotiated. Auto-renewal rates verified (often lower!). Partial withdrawals structured.

Consolidation at renewals simplifies ladders. Deadlines calendared, rates haggled.

Step-by-step walkthrough

Guide: 6 % monthly vs. 6.1 % yearly

Monthly: (1 + 0.06/12)^12 − 1 ≈ 6.168 %.
Yearly 6.1 % stays 6.1 %.
The lower 6 % wins. Compare APYs, never nominals.

Guide: $20,000 emergency fund

$5,000 HYSA (4.5 % APY).
$10,000 CD ladder (5 %+).
$5,000 inflation-protected (1-year lock). Mixed ≈4.8 % fully covered.

Guide: $10,000 across three offers

Bank A 4.5 % yearly: $450.
Bank B 4.4 % monthly: 4.49 % APY → $449.
Bank C 4.35 % daily: 4.45 % APY → $445. A wins - nominals lied, APY told truth.

Guide: real-terms check

Account: 4.6 % APY. Inflation: 3.2 %.
Real: (1.046/1.032)−1 ≈ 1.36 %.
Verdict: grows slowly - ok for emergency funds, not 30-year wealth.

Guide: splitting $50,000 cash

$10,000 instant HYSA (emergencies).
$30,000 CD auto-ladder (yield).
$10,000 yearly inflation-protected (hedge). Reviewed quarterly.

Guide: bonus vs. rate at $8,000

$200 bonus + 4.0 % APY for one year ≈ $520 total.
No-bonus 4.6 %: $368.
Bonus wins year one; APY every year after - take bonus, then move.

Guide: balance-transfer true costs

$5,000 at 0 % for 12 months + 4 % fee = $200.
Effective: ~7.3 % APY-equivalent on monthly paydown.
Vs. 24.99 % cards: saves ~$900. Vs. 10 % personal loans: roughly par - compare!

Guide: broker vs. bank CDs

Bank: 5.0 % APY, early exit costs 6 months interest.
Broker: 5.3 %, but selling to exit (price risk!).
Hold-to-maturity certain? Bank. Max yield, never touch? Broker.

Guide: points break-even horizon

Loan $300,000, 6.5 % vs. 6.25 % + $3,000 points.
Monthly savings ≈ $50.
Break-even: 60 months. Stay 10 years: net +$3,000. Move in 3: net −$1,200.

Guide: minimum-payment trap math

$5,000 at 24.99 %, $150 minimums.
Month-one interest: ~$104 - only $46 amortizes.
Payoff: ~5 years, ~$3,900 interest. Double payments: ~2 years, ~$1,300.

Guide: parking $25,000 for 8 months

Split by safety: $15,000 fixed needs to CDs maturing closing week.
$6,000 maybe-needs to no-penalty CDs (0.4 over HYSA, exit from day six).
$4,000 truly liquid to HYSA (appraisers and notaries surprise every buyer).
Recompute after-tax yields at marginal rates before final.

Worked examples

Question	Answer
6 % monthly	6.168 % APY
6 % daily	6.183 % APY
5 % quarterly	5.095 % APY
$20,000 mixed 4.8 %	≈$960/yr
$10,000 CD 5 % 1 yr	$500
4.4 % monthly	4.49 % APY
4.35 % daily	4.45 % APY
4.6 % APY, 3.2 % inflation	≈1.36 % real
$10,000 chasing +0.3 %	≈$30/yr
$8,000 bonus+4.0 % vs 4.6 % pure	Bonus wins year 1 only

Complete reference tables

Nominal → effective annual rate (APY)

Nominal	yearly	half-yearly	quarterly	monthly	daily
1%	1%	1.002%	1.004%	1.005%	1.005%
2%	2%	2.01%	2.015%	2.018%	2.02%
3%	3%	3.022%	3.034%	3.042%	3.045%
4%	4%	4.04%	4.06%	4.074%	4.081%
5%	5%	5.062%	5.095%	5.116%	5.127%
6%	6%	6.09%	6.136%	6.168%	6.183%
7%	7%	7.122%	7.186%	7.229%	7.25%
8%	8%	8.16%	8.243%	8.3%	8.328%
10%	10%	10.25%	10.381%	10.471%	10.516%
12%	12%	12.36%	12.551%	12.683%	12.747%

Nominal to APY (selection)

Nominal	Yearly	Quarterly	Monthly	Daily
4 %	4.000 %	4.060 %	4.074 %	4.081 %
5 %	5.000 %	5.095 %	5.116 %	5.127 %
6 %	6.000 %	6.136 %	6.168 %	6.183 %
7 %	7.000 %	7.186 %	7.229 %	7.251 %
8 %	8.000 %	8.243 %	8.300 %	8.328 %
10 %	10.000 %	10.381 %	10.471 %	10.516 %

Common mistakes to avoid

Comparing nominal rates across frequencies directly. APYs unify; nominals deceive - convert everything first.
Ignoring compounding in simple loan quotes. Daily accruals dwarf stated rates - annualize every quote.
Forgetting APYs mostly exclude fees and taxes. Monthly fees and brackets decide net yields - subtract both.
Assuming daily beats monthly hugely (basis points, not points!). Balances decide relevance - chase levels instead.

Pro tips

Rank savings by APY alone - frequency already inside. Minimums modeled too.
Rank loans by APY plus fees over YOUR holding period. Terms matched carefully.
Continuous compounding (e^r − 1) is the theoretical ceiling - daily reaches 99.99 percent of it.
Frequency matters mostly at high rates and big balances. Small accounts chase bonuses instead.
Re-check rankings yearly (banks move quietly). Drifted accounts moved promptly.
Screenshot offer APYs with dates for disputes. Retention offers negotiated with proof.

Where you will use this

Picking savings

APY rankings decide every comparison in one number. Fees and access break ties. Minimums modeled, screenshots dated for disputes.

Variable loans

Convert quoted nominals for comparison with fixed offers. Terms matched. Caps budgeted, worst cases modeled.

Investment projections

Use APYs (never double-count compounding). Real terms for decades. Taxes layered honestly.

Emergency funds

Max APY with instant access wins. Tiers by job risk. Credit lines as backup only.

CD ladders

Stagger maturities; compare APYs per rung. Penalties modeled. Calendars shared with partners.

Rate shopping

Compare real after-tax APYs - not posters. Screenshots dated. Retention offers negotiated.

Ranking savings

Sort offers by APY alone; frequency already inside. Re-rank yearly. Drifted accounts moved.

Glossary

Nominal rate	Stated rate before compounding. Lenders quote it; savers convert it. Frequency disclosed alongside.
APY	True yearly yield. The only savings number that matters. Regulation standardizes it.
Compounding period	How often interest joins principal. Monthly, daily, continuous - APY unifies all.
Continuous	Limit as frequency nears infinity (e^r−1). Theory admired; daily reaches 99.99 percent.

Frequently asked questions

What is APY?

Annual percent yield - true yearly growth including compounding. The only savings number that matters. Nominal posters ignored.

Nominal or APY?

Always compare APYs; nominals hide frequency. Posters lie, APYs tell. Frequency already inside.

Frequency matters?

Moderately: monthly vs. yearly at 6 percent ≈0.17 points - relevant at big balances. Basis points, not points. Small accounts chase bonuses.

APY back to nominal?

Tool mode above: nominal = n × ((1 + APY)^(1/n) − 1). Grids verify. Lenders quote nominals; convert them.

5 percent daily as APY?

About 5.127 percent. Grid checked. Continuous would match to the third decimal.

Continuous much better?

Barely vs. daily: e^0.06 − 1 = 6.184 vs. 6.183 daily at 6 percent. Theory admired, ignored in practice.

Why do banks advertise APY?

Regulation (Truth in Savings!) forces comparable disclosure. Nominal games banned. Standardized math wins.

APY changeable?

Variable accounts yes; CDs/bonds lock. Revert rates watched. Contracts read before chasing.

Emergency fund how big?

3-6 months spending, tiered by access speed. Job risk sizes tiers. Credit backup only.

Real vs. nominal APY?

Nominal minus inflation effects - the only number growing wealth. TIPS guarantee real legs.

Chase highest rates?

At big balances yes; under ~$10,000 bonuses and convenience win. Thresholds computed per household.

Money market vs. HYSA?

Funds pay slightly more, no FDIC; compare own rates. Sweep accounts differ structurally.

CD ladder how?

Auto-rolling maturities = permanent short rates plus weekly liquidity. Rungs sized to spending years.

Rate-plus and bonds?

Prices fall (duration × change); new buyers earn more henceforth. Ladders individualize control.

Bonuses taxable?

Yes, as interest income - still usually worth it. 1099-INT issued. Net math done anyway.

Daily periodic rates?

Nominal ÷ 365 - applied to daily balances, hence APY exceeds nominal. Statements bury this mechanism.

Balance transfers worth it?

Usually yes vs. high rates - annualize upfront fees first. Payoff calendared inside promos. Transfer traps (new purchases!) avoided.

Broker vs. bank CDs?

Broker: higher, no exit at par. Bank: penalties, but plannable. Hold-to-maturity decides. Yield chasers pick brokers.

Emergency buckets?

Monthly slices for lumpy bills - reverse budgeting. Tiers labeled literally. Shortfalls borrowed from fun.

Points pay off?

Only past break-even (cost ÷ monthly savings) - horizons decide. Staying modeled. Movers lose; lifers win.

Capitalizing interest?

Unpaid interest joins principal - pay during school/deferment to prevent. Accruals tracked. Forbearance costs modeled.

Yield to maturity?

Total returns holding to redemption - APY cousins for bonds. Funds approximate. Calls adjust math.

Compare after-tax yields?

Each into after-tax APY with marginal rates (Treasuries skip state tax!). Municipals modeled. Brackets applied yearly.

T-bills really state-tax-free?

Yes, federal law frees Treasury interest from state tax - half a point worth in high-tax states. Bills, notes, bonds qualify. Funds holding Treasuries pass through partially.

Multi-million FDIC coverage?

Sweep networks split across partner banks (each under $250k insured!). Trust titling multiplies. Advisors structure. Beneficiaries reviewed yearly.

No-penalty CDs vs. HYSA?

When rate locks plus paperwork cover weeks - compare honestly. Liquidity needs decide. Partial withdrawals structured.

Rates once capped?

Regulation capped until deregulation - inflation broke ceilings. History rhymes with caps debated. Money funds emerged then.

Negative rates for savers?

Retail mostly spared directly, institutions bled - cash hoarding was rational. Fees substituted quietly instead.

Jumbo CDs worth it?

Mini premiums rarely beat splitting - negotiate big sums, ladders first. Relationship rates asked. Private banking weighed.

Cash drag ok?

3-6 months spending plus known items; rest temperament (buffers!). Opportunity costs accepted explicitly.

Fintech savings safe?

Rates lead, pass-through insurance plus parties - verify titling, keep operating cash direct. Sweep mechanics read. Outage backups kept.

Corporate sweeps?

Nightly auto-moves checking-to-yield - corporate cash works sleeping. Thresholds set. Earnings credits compared.

APY formula myself?

Balances times brackets: 1 plus rate through frequency to the power frequency minus 1; tools compute. Grids verify. Spreadsheets double-check.

Daily much better?

Basis points only; chase rate levels, not frequency. Balances decide relevance. Big money notices; small ignores.

Teaser rates?

Rank post-teaser APYs over true holding periods. Revert rates verified in writing. Grandfathered tiers monitored.

Fees inside?

APYs exclude fees; subtract for true yields. Monthly fees kill small balances. Waivers secured via direct deposit.

APYs change?

Banks move variables quietly; check rankings yearly. Alerts set. Competitor screenshots kept for disputes.

Compounding visible?

Statements bury; APYs expose true yields. Tiers modeled marginally. Disclosures parsed, not skimmed.

One account?

Split emergency funds and buckets anyway. Labels beat lumps. Automation split per bucket.

Time Fed cycles?

Lock long in high phases, stay flexible cutting - track meeting dates. Ladders adjusted. Dot plots parsed.

HYSA tax example?

$10,000 at 4 percent = $400 interest: brackets tax it, timing planned - forms filed! Estimates quarterly. States added.

CD tax example?

$50,000 over 3 years at 3.5 percent = $5,250 interest: taxes ~$1,260, net 2.58 percent APY. Accruals yearly. Alternatives compared.

Gold tax deadline?

Physical after 1 year at 28 percent collectibles; silver starts premiums underwater. Structures chosen. Dealers report cash.

Crypto tax deadline?

Sales after 1 year long-term; under a year ordinary over thresholds. Every trade tracked. Exchanges report; verify.

Renewal deadlines?

Maturity plus 7-10 day objections - alarms BEFORE maturity, rates negotiated. Auto-rolls verified. Consolidation considered.

HYSA or CDs in 2026?

Emergency funds (3-6 months!) to HYSAs (flexible!), rest via CD ladders (staggered maturities!) - split by access needs, both compared by APY and re-ranked yearly. Drifted accounts moved; screenshots kept.