Why Daily Crediting Beats the Sticker Rate

High-yield savings accounts and money market accounts advertise an APY, but the interest that compounds inside them is credited on a schedule — many online banks post it daily. When interest is credited daily, each day's earnings start earning their own interest the next day, which pushes your true annual return slightly above the nominal rate: at 4.50%, daily crediting yields about 4.602% annually versus 4.500% for annual crediting. The difference sounds trivial on a single dollar, but across years of deposits it compounds into a meaningful gap — and switching your emergency fund from a 0.1% big-bank account to a 4.5% high-yield account is the single highest-return, zero-risk change most people can make. This calculator models the exact credited schedule and shows the compounding effect against a simple-interest baseline.