Truth-In-Savings requires certain disclosures on periodic statements. One of the disclosures required on dividend-bearing accounts is the “annual percentage yield earned (APYE)”. The APYE is an annualized rate that reflects the relationship  between the amount of dividends actually paid to the member’s account during the period and the average daily balance in the account for that period.

 

*Note - this calculation uses the member’s average daily balance for the period, even though the dividend calculation may be simple daily or others.

 

The General Formula is:

 

                                                            (365/days in period)

APYE = 100 [ ( 1 + dividends earned/balance              ) - 1]

 

Where “balance” is the average daily balance in the account for the period;

 

“Dividends earned” is the actual amount of dividends earned for the period.

And;

 

“Days in the Period” is the actual number of days over which the dividends disclosed on the statement were earned.

 

Example:

 

Calculate the APY earned for the statement period of 31 days for an account with an average daily balance of $1436.61 and dividends earned during the period of $3.36.

 

 

                                               365/31

APYE = 100 [ ( 1 + 3.36/$1436.61      )              -1]%

APYE = 2.788% rounded to 2 positions

APY Earned = 2.79%

APYE Scientific Calculator Keystrokes:

 

 1) 365 / 31 = 11.77419 (Store in Memory using key = STO) (truncate to 5 decimal places)
 2) 3.36 / 1436.61 = .00233  (truncate to 5 decimal places)
 3) 1 + .00233 = 1.00233 
 4) 1.00233 (recall memory value using keys Yx, RCL) = 1.02788
 5) 1.02788 - 1 = .02788
 6) .02788 * 100 = .2788
 7) Final result rounded to 2 decimal places for 2.79%