APY calculator

Convert a quoted interest rate into the effective annual yield, and see what compounding adds.

AER

4.594%

Compounding adds 0.094 percentage points to the quoted 4.5%.

Interest in year one: £459.40
Balance after 1 year: £10,459.40
Total interest: £459.40
Compounding periods: 12/year

Assumes the rate holds for the full period and interest is left in the account. Most savings rates are variable. In the United Kingdom this figure is usually quoted as AER — annual equivalent rate.

How this is worked out

APY = (1 + r ÷ n)^n − 1

What this assumes

A calculator is only as good as what it leaves out. These are the assumptions built into the result above.

The rate stays the same for a full year. Most savings rates are variable.
Interest is left in the account to compound rather than withdrawn.
Tax is not deducted.

Educational information only. This page explains how something works in the United Kingdom. It is not financial advice and does not take account of your circumstances. Rates, fees and eligibility change without notice — check the provider’s own terms before you act.

For free, impartial guidance, see MoneyHelper. To complain about a firm, contact the Financial Ombudsman Service.