Money Market Yield Calculator
The formula
What the money-market yield tells you
Same discount instrument as BEY, restated on a 360-day invested-funds basis — how CDs and bank money-market desks quote so deposit rates are comparable.
Calculation: MMY (CD equivalent) = (360 × d) ÷ (360 − d × t). Enter your inputs and every substitution is shown below the result.
Reading the result
Three conventions describe one bill: discount rate (flattered), money-market yield (360), bond-equivalent (365). The ordering of the numbers tells you which convention someone is using.
Rules of thumb: Fed policy rates are proxied by effective fed funds, close to MMY on overnight paper
Limitations and best practice
Treat the 360-day year as a fee: quoted money-market yields overstate a true annual return by ~1.4% relative.
This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Frequently asked questions
Which yield should a CD buyer compare?
MMY vs APY — what do banks advertise?
Source & methodology
Federal Reserve H.16 conventions; CFA Level I money-market yields.
Money Market Yield: what this tool answers
Capital decisions deserve better than a gut feeling — this page gives you the arithmetic to defend one. Money Market Yield is the kind of number people argue about from memory. This page ends that argument with arithmetic you can watch happen: enter your figures, get Money-market yield in real time, and see every substitution printed below.
There is a habit that separates people who get useful answers from Fixed Income numbers: they decide what question the figure answers before they compute it. Money Market Yield answers “Money-market yield?” — and nothing else, which is precisely why the result is trustworthy.
The useful way to hold Money Market Yield is as a ratio with a story attached: MMY (CD equivalent) = (360 × d) ÷ (360 − d × t) says how the parts combine, and the 4.95% figure above is simply that sentence written in numbers. Everything that follows unpacks one clause of the sentence at a time.
What makes a calculation page trustworthy is that its copy is derived from its own arithmetic: here money-market yield = 4.95%, recomputed every time a field changes, and the sensitivity section ranks the inputs that move the result — Discount rate first, at ≈10.1 % of the headline for a ten-percent error either way in that input — which is the thread the rest of this guide pulls on.
Every input in Money Market Yield, and what it does to the answer
One formula, published in full: MMY (CD equivalent) = (360 × d) ÷ (360 − d × t). Anything you can read, you can reproduce in a spreadsheet, and that reproducibility is the whole point of printing it rather than hiding it behind a button.
Discount rate (%) (example value 5) is a plain measured quantity — the unit shown in the label is the unit the formula expects. Check the convention first: if the source says “6.5 % per year”, type 6.5 and let the formula do the rest.
Days to maturity (example value 74) is a numeric input whose unit is fixed by the label; a wrong unit is a wrong answer wearing a plausible disguise. Be precise about the boundary (exact date, start of month); time inputs decide the exponent in most formulas.
Money Market Yield on the example inputs: the complete substitution
The tool prints its own working; this is the same arithmetic on the example values, reproduced so you can follow it by hand. Starting figures: Discount rate (%), Days to maturity. The endpoint of that chain is 4.95% of money-market yield, sitting in the “The rate bankers and CD desks quote” band.
- MMY = 360 × 0.0490 ÷ (360 − 0.0490 × 74) = 4.95%
Bond-equivalent yield (365-day) — 5.02 %. If your inputs change, this is usually the first companion figure to move.
Face-to-price markup — 1.007 %. If your inputs change, this is usually the first companion figure to move.
Effective annual if rolled — 5.04 %. Read next to the headline, this is the figure that shows the shape of the trade-off.
Overwrite any input above and every line of this example updates with it — the substitution is live, not a screenshot of somebody else’s numbers.
How far Money Market Yield can reasonably move
Read this table as the practical error bar on the headline figure. It answers the question people actually have after seeing a single number: how wrong could this be if the main input is off by ten or twenty percent?
| Discount rate setting | Money-market yield |
|---|---|
| 80 % of the example value | 3.95% |
| 90 % of the example value | 4.45% |
| example inputs | 4.95% |
| 110 % of the example value | 5.45% |
| 120 % of the example value | 5.95% |
That spread — 3.95% at the low end, 5.95% at the high — is what a careful read of Money Market Yield looks like: a band you can state out loud, with the reason for each edge. Reproduce it in the form above by editing Discount rate alone; the substitution steps will follow your figures exactly.
What actually moves your Money Market Yield
Nobody should have to guess which input matters. The engine was re-run once per field below — ten percent up, ten percent down, everything else frozen — and the results ranked by how far they moved the money-market yield. Read it as a map of where Money Market Yield is fragile — drawn for the example inputs, which is the map you want when deciding what to measure carefully.
- Discount rate: ten percent up gives 5.45%, ten percent down gives 4.45% — ≈10.1 % of the money-market yield either way
- Days to maturity: ten percent up gives 4.95%, ten percent down gives 4.94% — ≈0.1 % of the money-market yield either way
Discount rate is the dominant lever here: ten percent either way moves the result by about 10.1 %, from 4.45% to 5.45%. Measure that input from a document rather than from memory, and treat Days to maturity as the second priority (≈0.1 % per ten percent). Everything below that can stay approximate, which is a licence to stop chasing data that would not change the decision.
Reading the result: bands, zones and thresholds
The value above only becomes useful the moment you know what it is being measured against. The default case lands in the “The rate bankers and CD desks quote” band, and bands are deliberately wide because real situations overlap. How much of that band is luck? On Discount rate alone ten percent either way covers 4.45% to 5.45%. The practical reading rules: read the band as a starting hypothesis, then test it: change the two dominant inputs by ten percent and see whether the verdict survives. Verdicts that survive stress are the ones worth acting on.
Set Money Market Yield beside its neighbours and it usually plays a specific role: this figure establishes the size of something, and the neighbouring tools establish whether that size is acceptable. Skipping the first step makes the second one arbitrary.
The errors that quietly break a Money Market Yield figure
Treat the 360-day year as a fee: quoted money-market yields overstate a true annual return by ~1.4% relative. This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Feeding best-case scenarios and calling them plans. Run the number at least at expected and at pessimistic inputs; the gap between them is the actual risk you are accepting.
Attention is also misallocated between fields. Having measured this engine, we can say where it belongs: Discount rate first, everything else second.
The subtlest error is answering the wrong question precisely. Confirm that money-market yield is actually the quantity your decision needs — the arithmetic is flawless either way, which is what makes the mistake invisible.
Six things to confirm before acting on Money Market Yield
- Re-run the calculation with a ±10 % stress on the two most sensitive inputs.
- Verify each input against its original source document, not memory.
- Put Discount rate under a magnifier; the sensitivity table above is the reason why.
- Record the date and the inputs alongside the number so future-you knows what was assumed.
- Confirm the example values are plausible for your own situation before replacing them.
- Confirm the answer against one independent method or published benchmark for Money Market Yield.
How to use the Money Market Yield tool properly
The tool does the arithmetic; the routine below is what makes the arithmetic trustworthy. Five steps, a minute total — and afterwards you will know not just what the number is, but which assumption produced it.
Step 1 — collect, then type. Everything this tool asks for is listed above (discount rate (%), days to maturity). Pull each figure from something you can point at — paperwork, a dashboard, a label — before touching a field. Guesswork at the input stage cannot be repaired at the interpretation stage. Suspiciously tidy answers deserve the same scrutiny as untidy ones.
Step 2 — enter the conservative case first. Resist the flattering scenario. Type the inputs you would defend in front of a sceptical reader, read the Money-market yield (4.95% for the example values), and note the verdict band. If the verdict changes with a ten-percent nudge, report the nudge alongside the number.
Step 3 — measure what deserves measuring. The ranked levers above tell you where a careful figure pays off. Everything else can stay approximate, which is a licence to stop hunting for data you do not need. One decimal place more than your data supports is one decimal place of fiction.
Step 4 — stress before you commit. A decision that survives a ten-percent squeeze on its two biggest inputs needs no luck to be sound. One that does not survive is a decision about hope, not about arithmetic. A figure nobody can reproduce is a figure nobody will act on twice.
Step 5 — record the context, not just the number. Note today’s date and the inputs alongside the 4.95% output. Six months from now the context is what turns this figure into a trend. Repeating a calculation with the same numbers proves only that the arithmetic is reliable — which is worth knowing.
The real-world conversations Money Market Yield settles
In Fixed Income the figure computed here is usually the first one somebody asks to see. Having it — with the formula behind it — changes your position in the conversation from participant to reference. Estimates improve most when the worst case is written down in ink.
Professionals in Fixed Income use this style of calculation as a screening filter before spending real money or effort: a quick Money Market Yield check eliminates weak options in minutes, and the survivors earn the deeper, slower analysis. Precision is a promise you make about your data; make sure your inputs can keep it.
Re-running this page costs nothing and catches the slow drifts that never announce themselves. In Investing & Markets the expensive mistakes are rarely sudden; they are small changes in Discount rate (%) that nobody recalculated for a year. Comparisons are cheap: run the identical calculation for the alternative and look at the gap.
The questions that come up most about Money Market Yield
What affects Money Market Yield the most?
The short answer: Discount rate. The longer answer is the sensitivity table on this page, where every numeric input was probed by ten percent and the money-market yield recalculated — Discount rate moved it furthest, by roughly 10.1 % (4.45% to 5.45%).
Which matters more: days to maturity or discount rate?
By the numbers, Discount rate: a ten-percent change in it moves the result ≈10.1 %, versus ≈0.1 % for Days to maturity. Spend your measuring effort in that order — precision on the weaker lever buys almost nothing.
What is a typical Money Market Yield?
There is no honest universal average for Money Market Yield, but there is a reference point: the defaults on this page produce 4.95% (The rate bankers and CD desks quote). Replace the inputs with your own and compare — that comparison is the useful meaning of “typical”.
How do I calculate Money Market Yield by hand?
Use the stated model — MMY (CD equivalent) = (360 × d) ÷ (360 − d × t) — and substitute in the order the tool prints (it starts from MMY = 360 × 0.0490 ÷ (360 − 0.0490 × 74) = 4.95%). On the example inputs the hand route lands on 4.95%, exactly what the calculator shows. A spreadsheet reproduces it in two or three cells; doing it once by hand is what makes the automated answer trustworthy.
What happens to Money Market Yield if discount rate changes by 10 %?
On these inputs a ±10 % change in discount rate takes Money Market Yield to 5.45% against the 4.95% example — around 10.1 % of the headline. The same test on every other field is in the sensitivity section.
Is the Money Market Yield result of 4.95% good or bad?
Good and bad are comparisons, so the honest test is three questions: where does your own Money Market Yield sit against the 4.95% reference above, how far would a plausible input error move it (≈10.1 % per ten percent on Discount rate), and what does the alternative option compute to?
How do I calculate Money Market Yield manually?
Write down the inputs, then follow the printed steps in order — MMY (CD equivalent) = (360 × d) ÷ (360 − d × t). A spreadsheet replicates it with two or three cells. The manual route is worth doing once to build intuition; after that the calculator saves time and eliminates transcription slips.
Can Money Market Yield be negative or empty?
Yes, and that is informative rather than broken: a negative Money Market Yield usually means the inputs encode an outflow or a shortfall, and the verdict band above labels exactly that situation instead of hiding it.
Which yield should a CD buyer compare?
Take each bank's APY (annual percentage yield — geometric with compounding). The bank's "rate" is whatever convention pays them best.
MMY vs APY — what do banks advertise?
APY compounds and is the honest number for a year of rolled deposits; money-market yield is a simple annualization of a single instrument on a 360-day base.
Does this Money Market Yield tool store my numbers?
No. The entire calculation runs in your browser session; nothing entered above is transmitted or saved, which is the correct behaviour for sensitive Investing & Markets figures and the reason you can re-run this page as often as you like.
What the labels on this page mean
- Bond-equivalent yield (365-day)
- 5.02 % for the Money Market Yield worked case; it sits next to the main result because it carries context the headline leaves out.
- Face-to-price markup
- 1.007 % in the default Money Market Yield calculation — one of the secondary figures an experienced reader checks before trusting the primary number.
- Effective annual if rolled
- 5.04 % on the example inputs — a companion figure printed beside the headline of Money Market Yield so that no result is read in isolation.
- Money-market yield
- The primary output of this tool: 4.95% for the default inputs, computed exactly from MMY (CD equivalent) = (360 × d) ÷ (360 − d × t).
- Worked example
- The step-by-step substitution printed above, so the arithmetic can be re-derived by hand or in a spreadsheet.
- Verdict band
- A named zone on the range of plausible results; the example inputs land in “The rate bankers and CD desks quote”, and your inputs may not.
- Sensitivity (±10 %)
- How far the Money Market Yield moves when a single input is nudged ten percent either way; the ranked list on this page is computed live from this engine.
Where the Money Market Yield model comes from
Everything above runs on one stated formula, applied without hidden coefficients: MMY (CD equivalent) = (360 × d) ÷ (360 − d × t). Source of record: Federal Reserve H.16 conventions; CFA Level I money-market yields. Any other implementation of this model should return the same figure for the same inputs. If one does not, the difference is in its assumptions — which this page prints and that one probably does not.
Treat the output as a precise answer to the question you typed: exact arithmetic, transparent formula, published source, no hidden rounding. Nothing is smoothed, weighted or adjusted behind the scenes; where judgement enters, this page says so and names the input responsible.
What to do with your Money Market Yield next
Pair this figure with the companion outputs above — the headline sizes the prize, the companions describe the risk.
The audience here is investors and founders comparing opportunities on equal terms. Everything you need to defend the result — formula, substitution, sensitivity, source — is printed above, so the only remaining variable is the honesty of your inputs.