APY meaning in plain terms
APY stands for annual percentage yield. It shows what a balance earns in one year, including compounding. A simple rate only counts earnings on your original amount. So APY is usually a little higher than the stated rate.
Compounding means your returns start earning returns too. “Paid daily” tells you how often returns reach your balance. That timing is what lets them compound.
How APY, compounding and daily payouts work
APY vs simple interest
Let’s use one balance: 10,000 at 3.5%.
With simple interest, you earn 350 in a year.
Compound the same 3.5% daily, and the APY becomes about 3.56%. That’s roughly 356 in a year.
The formula is APY = (1 + r/n)^n − 1. Here, r is the yearly rate and n is compounding periods per year.
APY folds in earning on earnings. That makes it the fairer number to compare.
Why payout frequency matters
Two frequencies shape your returns. Compounding frequency sets how often returns are added and start earning too. Crediting frequency sets when you can see and use them.
The two don’t always match. Many accounts compound daily but post returns monthly.
At 3.5% on 10,000, daily compounding earns about 356.18 a year. Monthly compounding earns about 355.67. The gap is about 0.50 a year: small, but real.
The bigger win from daily crediting is access. You can spend or move returns the day they arrive.
How to compare offers
Check these before you choose:
- Compare APY to APY, not a rate to an APY. APR is different: it’s what you pay to borrow.
- Check whether the rate is “up to”, promotional or variable, and what unlocks it.
- Check how often returns are credited.
- Look for lock-ups, notice periods and withdrawal penalties.
- Look for fees or minimums that reduce what you keep.
- Check the currency, because a yield is only as useful as the currency it’s in.
Here’s what that can look like. With Nu Global, your balance works for you. You earn up to 3.5% on digital dollars (USDC) and 2.2% on digital euros (EURC). Returns are based on how much you hold and for how long.
They’re credited daily. There’s no lock-up, notice period, early-withdrawal penalty or fee to earn.
Compare offers by APY, then check access
Use APY to compare offers side by side. Payout frequency changes the numbers slightly. It changes your access a lot. And always read the “up to”.
Your Nu Global balance works for you from day one, in digital dollars or digital euros. Learn more about how Earn works in your Multi-currency Account.
