APY Calculator
Turn a nominal APR into the effective annual yield (APY) you actually earn once compounding is counted — or flip the toggle and work backwards from an advertised APY to the underlying APR. The table compares every common frequency for your rate, with the yearly interest on a balance you choose. All in your browser.
| Compounding | APY | Interest / year |
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APY (or EAR) is what you actually earn in a year once compounding is counted; APR is the simple nominal rate before compounding. The more often interest compounds, the higher the APY — though above monthly the gains are small. Flip the direction toggle to work backwards from an advertised APY to the underlying APR.
APR is the sticker; APY is the truth
APR is the rate before compounding; APY is what you actually earn after interest starts earning interest. Banks know this, which is why they quote APY on savings (the bigger number) and APR on loans (the smaller one). When you compare two accounts, compare APYs — it's the only apples-to-apples figure.
Why frequency matters less than you'd think
Compounding more often does raise your yield, but with sharply diminishing returns. The jump from annual to monthly is real; from monthly to daily to continuous, the gains are tiny. The table makes this concrete — for most rates, the difference between daily and continuous compounding is a rounding error. Chase the higher headline rate, not the fancier compounding.
Related
- Personal finance hub — all our money calculators and guides
- Compound interest calculator — project balances over time
- Savings goal calculator — plan toward a target
- Loan calculator — APR on the borrowing side
FAQ
Is anything I enter sent to a server?
No. The calculator runs entirely in your browser — open DevTools → Network and confirm. Nothing you type is uploaded.
What's the difference between APR and APY?
APR (annual percentage rate) is the simple nominal rate, before compounding. APY (annual percentage yield, sometimes called EAR — effective annual rate) is what you actually earn in a year once interest compounds on itself. If a savings account quotes 5% APR compounded monthly, your real yield is about 5.12% APY. Banks advertise APY on deposits (it's higher, so it looks better) and APR on loans (it's lower, so it looks better) — this tool lets you see both.
How is APY calculated?
APY = (1 + APR/n)ⁿ − 1, where n is the number of compounding periods per year. For continuous compounding it's APY = e^APR − 1. The more frequently interest compounds, the higher the APY for the same APR — because you start earning interest on interest sooner.
Can I convert APY back to APR?
Yes — flip the APY → APR toggle. It inverts the formula: APR = n · ((1 + APY)^(1/n) − 1), or APR = ln(1 + APY) for continuous compounding. That answers questions like "my account advertises 5.116% APY compounded monthly — what's the underlying nominal rate?" (5.000%). Switching direction converts the number in place, so the conversion round-trips cleanly.
Does compounding more often make a big difference?
Up to a point. Going from annual to monthly compounding is a noticeable bump; going from monthly to daily or continuous adds very little. The table shows why — at 5% APR the APY only climbs from 5.116% (monthly) to 5.127% (continuous). The dollar line under the headline makes it concrete: on $10,000 at 5% APR, monthly compounding earns about $12 more per year than annual. The headline rate matters far more than the frequency.
Is APY the same as interest I'll actually receive?
APY is the rate; multiply it by your balance for the yearly interest (the calculator does this on the sample balance you enter). Real-world returns can differ if the rate changes during the year, if you add or withdraw money, or if there are fees — APY assumes a fixed rate on a fixed balance for a full year.