Annual Percentage Yield (APY) is the effective annual rate of return on a savings or investment product, accounting for compounding. Unlike APR (which ignores compounding), APY tells you exactly how much your money will grow in a year. A high-yield savings account paying 4.5% APR compounded daily has an APY of about 4.6%. Always compare APY-to-APY when shopping savings accounts and CDs — the difference between simple APR and compounding APY can be meaningful at higher rates. Banks are required by the Truth in Savings Act to disclose APY on deposit products.
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APY
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
1099 Form
Form 1099 is a family of IRS forms reporting various types of non-W-2 income. 1099-NEC reports nonemployee compensation…
529 Plan
A 529 plan is a tax-advantaged education savings account. Contributions grow tax-free; withdrawals for qualified education expenses (tuition,…
ABLE Account
Achieving a Better Life Experience (ABLE) accounts are tax-advantaged savings accounts for individuals with disabilities (onset before age…
AGI
Adjusted Gross Income (AGI) is your total gross income minus specific 'above-the-line' adjustments — traditional IRA contributions, student…
APR
Annual Percentage Rate (APR) is the yearly cost of borrowing money expressed as a percentage of the loan…
Asset
An asset is anything you own that has economic value — cash, investments, real estate, vehicles, ownership interests…
