What is the difference between APR and APY?

APR is the simple annual rate without compounding. APY accounts for how often interest compounds, giving you the true effective return. More frequent compounding means a higher APY than APR.

APR to APY Calculator

Convert APR into APY using compounding frequency.

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APR (%)

Compounding frequency

About This Calculator

APR (Annual Percentage Rate) is the interest rate without compounding. APY (Annual Percentage Yield) accounts for compounding frequency and reflects the true annual cost or yield. Lenders advertise APR; banks advertise APY on savings. This calculator converts between them so you're comparing apples to apples.

Estimates only — not financial, tax, legal, or investment advice. Verify important results with a qualified professional before making decisions.

APY = (1 + APR/n)ⁿ − 1 where n = compounding periods per year; annual interest on $10,000 = $10,000 × APY; difference = APY − APR