APY Calculator
APR and APY are not the same number: APY includes the effect of compounding, which is why savings accounts are advertised with it. Convert an APR into its APY here — or switch modes to project how a balance grows at a stated APY.
Results
Formula
How to use this calculator
- Choose the conversion mode or the growth mode.
- For conversion: enter the APR and how often it compounds.
- For growth: enter the amount, APY and years, then Calculate.
Worked example
An APR of 5% compounded monthly.
- Monthly rate: 5% ÷ 12 ≈ 0.4167%.
- APY: (1.004167)¹² − 1 ≈ 5.116%.
Result: A 5% APR compounded monthly is a 5.12% APY (rounded).
Frequently asked questions
Why do banks quote APY for savings but APR for loans?
US rules require each in its context: APY shows savers the effective earnings including compounding; APR shows borrowers an annualized cost including certain fees. Both exist to make offers comparable.
Can APY ever be lower than APR?
For the same compounding setup, no — compounding only adds. If a quoted APY looks lower than an APR, the two figures are measuring different products or fee treatments.
How much does daily vs monthly compounding matter?
Very little at typical savings rates — a few hundredths of a percent. The rate itself matters far more than the frequency.
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