APR to APY Calculator
Convert a nominal APR into the effective annual yield (APY) for any compounding.
Results update as you type.
About this calculator
APR (annual percentage rate) is a nominal rate that ignores compounding, while APY (annual percentage yield, also called the effective annual rate) is the rate you actually earn once interest compounds during the year. This calculator converts an APR into its APY for the compounding frequency you pick, so you can compare savings and loan rates on a true like-for-like basis.
The formula is APY = (1 + APR ÷ n)^n − 1, where n is the number of compounding periods in a year. For example, a 5% APR compounded monthly works out to an APY of about 5.116%, because each month’s interest starts earning its own interest. The tool also shows the rate per period (5% ÷ 12 ≈ 0.417% a month) and the yearly interest on a 10,000 balance so the gap is easy to see in currency.
Use it whenever two rates are quoted with different compounding — a savings account advertised at a monthly-compounded APR versus one quoted as an APY, for instance. The more often interest compounds, the higher the APY for the same APR, though beyond daily compounding the extra gain is tiny.
Frequently asked questions
What is the APR to APY formula?
APY = (1 + APR ÷ n)^n − 1, where n is the number of compounding periods per year. For 5% APR compounded monthly, APY = (1 + 0.05 ÷ 12)^12 − 1 ≈ 5.116%.
Why is APY always higher than APR?
Because compounding lets earlier interest earn its own interest during the year. The more often it compounds, the bigger the gap — although above daily compounding the extra gain becomes negligible.
Is APY the same as the effective annual rate?
Yes. APY and effective annual rate (EAR or EFF) are the same number computed the same way — the true annual return after compounding. "APY" is the term used for deposits, while "EAR" is more common for loans, but the formula is identical.
Should I compare savings accounts by APR or APY?
Compare by APY. It already folds in the compounding frequency, so it reflects what you actually earn in a year. Two accounts with the same APR but different compounding have different APYs, and the higher APY is the better deal.
Does more frequent compounding always mean more money?
It helps, but with diminishing returns. Going from annual to monthly compounding adds a noticeable amount, but from daily to continuous compounding the difference is fractions of a percent. There is a mathematical ceiling (continuous compounding) that APY approaches but never exceeds.
How do I convert an APY back to an APR?
Rearrange the formula: APR = n × ((1 + APY)^(1 ÷ n) − 1), where n is the compounding frequency. This is useful when a rate is advertised as an APY but you need the nominal periodic rate for a calculation.
API — use this calculator from code
Call this calculator as a free JSON endpoint — no key required. Send the field values below as query parameters or JSON. Read the full API docs →
Endpoint
GET https://calculator.free/api/v1/apr-to-apy/curl
curl "https://calculator.free/api/v1/apr-to-apy/?apr=5&freq=12"JavaScript fetch()
const r = await fetch(
"https://calculator.free/api/v1/apr-to-apy/?" + new URLSearchParams({
"apr": "5",
"freq": "12"
}));
const data = await r.json();
console.log(data.results);Results are estimates for general guidance only, not financial, medical or tax advice.