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An account's APY is the total amount of interest you'll earn on your deposit over one year, including compound interest, expressed as a percentage, with many HYSAs compounding daily or monthly.
Converting an annual interest rate (that is to say, annual percentage yield or APY) to the monthly rate is not as simple as dividing by 12; see the formula and discussion in APR. However, if the rate is stated in terms of "APR" and not "annual interest rate", then dividing by 12 is an appropriate means of determining the monthly interest rate.
Annual percentage yield (APY) is a normalized representation of an interest rate, based on a compounding period of one year. APY figures allow a reasonable, single-point comparison of different offerings with varying compounding schedules. However, it does not account for the possibility of account fees affecting the net gain.
For example, a nominal interest rate of 6% compounded monthly is equivalent to an effective interest rate of 6.17%. 6% compounded monthly is credited as 6%/12 = 0.005 every month. After one year, the initial capital is increased by the factor (1 + 0.005) 12 ≈ 1.0617. Note that the yield increases with the frequency of compounding.
Best CD rates today: Put your money to work with guaranteed yields up to 4.40% APY into 2026 — Feb. 5, 2025 Yahia Barakah Updated February 5, 2025 at 8:09 AM
The best APY on a widely available CD remains 5.51%, offered on a one-year term. Highest-yielding terms range from three months to two years, for which the top earners pay 5.00% APY or more.
Savings interest rates today: Yes, you can still find APYs of up to 5.05% as 2024 draws to a close — Dec. 30, 2024
Today’s highest savings rates are at FDIC-insured digital banks and online accounts paying out rates of up to 5.10% APY with no minimums at Patriot Bank, Forbright Bank and other trusted ...