APY to APR Calculator (and APR to APY)
Compare rates on equal terms. Convert a nominal APR to the effective APY for any compounding frequency, or turn an APY back into its APR.
Result
| Compounding | APY from this APR |
|---|
How to convert APR and APY
- Choose the direction of the conversion.
- Enter the rate and choose how often interest compounds.
- The table shows the APY for every compounding frequency at the same APR.
APR vs APY
APR (annual percentage rate) is the simple yearly rate; APY (annual percentage yield) is what you actually earn or pay in a year once interest compounds. APY = (1 + APR ÷ n)^n − 1, where n is the number of compounding periods per year. With continuous compounding, APY = e^APR − 1.
Savings accounts and CDs advertise APY because it is the bigger number; loans and credit cards emphasize APR. The gap grows with higher rates and more frequent compounding: 5% APR compounded monthly is 5.12% APY, while 24% APR on a credit card compounded daily is about 27.1%.
When comparing savings products, compare APY to APY. When comparing loans, remember that loan APR also includes some fees, so it is not purely an interest rate.
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Frequently asked questions
Which is higher, APR or APY?
APY, whenever interest compounds more than once a year. They are equal with annual compounding.
What is the APY of 5% APR compounded daily?
About 5.13%.
Why do credit cards quote APR?
Federal rules require APR disclosure for credit. The effective yearly cost (APY) is higher because interest compounds daily.
What compounding do savings accounts use?
Most compound daily and credit interest monthly. The quoted APY already accounts for it.