Free APY & APR calculator

APY vs APR, made simple.

Type any rate to convert instantly — and finally see which one you're being quoted.

APY: What you earnSavings · staking
APR: What you payLoans · cards

APY → APRAPR → APY

Your APY rate

Type the rate as a percentage, e.g. 4.5

Compounding frequency

DailyMonthlyQuarterlyAnnually

APRwhat you pay

4.8889%

A 4.8889% nominal APR compounded monthly is what produces a 5% APY. APR is the headline rate before compounding is counted.

APR = n × ((1 + APY)^(1 ÷ n) − 1)

where n = 12 (compounding periods per year)

APR = 12 × ((1 + 0.05)^(1 ÷ 12) − 1) = 0.048889

→ APR = 4.8889%

Educational tool — not financial advice.

Same math, opposite sides

The difference between APY and APR

APY and APR both describe a yearly interest rate. The difference is which side of the deal you're on — and whether compounding is counted.

APY

Annual Percentage Yield

What you EARN

In plain English

The real yearly rate of return once compounding is included — interest earning interest on top of interest.

Where you see it

Savings & high-yield accounts
Certificates of deposit (CDs)
Crypto staking & DeFi yields

Who it favors

You, the saver. A higher APY means your balance grows faster.

The gotcha

Because it bakes in compounding, APY always looks a little higher than the headline APR. That's not a trick — it's the true yearly figure.

APR

Annual Percentage Rate

What you PAY

In plain English

The nominal yearly rate before compounding. For loans it often also wraps in mandatory fees, but it does not show the compounding effect.

Where you see it

Credit cards
Personal & auto loans
Mortgages & lines of credit

Who it favors

The lender quotes it because it looks lower than the rate you'll actually pay.

The gotcha

Carry a balance and interest compounds, so your effective cost is closer to the APY than the APR on the sticker.

How to calculate APY and APR

Converting between APY and APR is just compounding math. Here are the exact formulas — no spreadsheet needed.

APR → APYFormula

APY = (1 + APR / n)ⁿ − 1

Example: 5% APR compounded monthly (n = 12) → 5.1162% APY

APY → APRFormula

APR = n × ((1 + APY)^{1 / n} − 1)

Example: 5% APY compounded monthly (n = 12) → 4.8889% APR

APR

The nominal annual rate, before compounding.

APY

The effective annual rate, after compounding.

Compounding periods per year: daily 365, monthly 12, quarterly 4, annually 1.

When APY vs APR matters

Whether a rate is quoted as APY or APR tells you which side of the deal you're on. Here's where you'll meet each one.

APY

Savings account

Banks advertise the APY because it includes compounding and looks bigger. Compare savings accounts by APY and you're comparing like for like.

You earn

APR

Credit card

Cards quote APR, but interest usually compounds daily. Carry a balance and what you actually pay creeps up toward the APY-equivalent.

You pay

APR

Personal loan

A loan's APR can also fold in fees, which makes it the better number for comparing the total cost of borrowing between lenders.

You pay

APY

Staking yield

Crypto platforms often show a headline APY assuming you auto-compound rewards. Check how often it compounds — and whether the rate is fixed.

You earn

APY vs APR — your questions, answered

Is APY always higher than APR?

For the same nominal rate, APY is higher than APR whenever interest compounds more than once a year, because APY counts interest earning interest. If compounding is annual (once a year), APY and APR are exactly equal. APY is never lower than APR.

Why do banks quote APY on savings but APR on loans?

It's about which number looks better to you. On savings, a bank wants the figure to look as large as possible, so it shows APY — the compounded, higher number. On loans and credit cards, the lender shows APR, the lower nominal rate, even though the amount you actually pay compounds toward the APY-equivalent.

Does compounding frequency change the result?

Yes. The more often interest compounds, the larger the gap between APR and APY. A 12% APR is 12.68% APY compounded monthly, but 12.75% APY compounded daily. The underlying nominal rate is the same — more frequent compounding just squeezes a bit more out of it.

What does 'compounding' actually mean?

Compounding is when the interest you earn (or owe) gets added to the balance, so the next round of interest is calculated on a slightly larger amount. Earn 1% a month and you don't make 12% a year — you make a little more, because each month's interest also earns interest.

Which number should I compare between products?

Compare like with like. For savings and deposits, compare APY against APY. For loans and credit cards, compare APR against APR (loan APR often includes fees, which makes it a fair total-cost comparison). Use the calculator above if one product quotes APR and another quotes APY.

Add this calculator to your site

Free to embed — for blogs, banks, fintech docs or class notes. Paste the snippet anywhere. All we ask is you keep the credit link.

Embed code

<iframe src="https://apyvsapr.com/embed" title="APY vs APR Calculator" width="100%" height="660" loading="lazy" style="max-width:520px;width:100%;border:3px solid #161616;border-radius:20px"></iframe>
<p style="font:14px/1.5 sans-serif;margin:8px 0 0">Free <a href="https://apyvsapr.com">APY vs APR Calculator</a></p>

Always free
No tracking scripts
Mobile-friendly
Live, accurate math