Money Market Calculator FAQ

APY (Annual Percentage Yield) reflects the true annual return including the effect of compounding, while APR (Annual Percentage Rate) is a simple yearly rate that does not include compounding. For a given nominal rate, APY will always be equal to or higher than APR. This distinction matters when comparing accounts that compound at different frequencies.

The 7-day yield is the average income return of a money market fund over the past seven days, annualized to show what the fund would earn in a year if that rate held steady. It is the standard SEC-required quote for money market funds and reflects fund expenses. Because it is backward-looking, it does not predict future performance.

The more frequently interest compounds, the faster your balance grows because each compounding period adds interest on top of previously earned interest. Daily compounding produces a slightly higher ending balance than monthly or quarterly compounding at the same nominal rate. Over long periods or large balances this difference becomes meaningful, which is why APY is the better comparison metric.

Yes, switch to target mode and enter your desired ending balance and time horizon. The calculator will solve for the required principal deposit or the interest rate needed to reach your goal. This is useful for planning savings milestones like an emergency fund or a near-term purchase target.

You can optionally enter a tax rate to see estimated after-tax earnings alongside the gross return. The calculator applies the tax rate to the interest earned only, not the principal. This is a simplified estimate that does not account for state-level taxes, AMT, or itemized deductions, so consult a tax professional for your specific situation.

A money market account (MMA) is a bank deposit product that is typically FDIC-insured up to $250,000 and may offer a variable APY. A money market fund is a type of mutual fund that invests in short-term government and corporate debt and is not FDIC-insured, though it aims for a stable $1 NAV. Money market accounts quote APY, while money market funds quote 7-day yield.

Yes, the calculator works for any interest-bearing deposit account. The comparison mode lets you enter multiple rate scenarios side by side, and the chart visualizes growth over time so you can compare ending balances across accounts, terms, or compounding frequencies at a glance.