APY Calculator — APR to APY Conversion
Banks advertise the flattering number: APY for savings (includes compounding) but APR for loans (excludes it). Convert between them and see what a rate really yields once compounding does its work.
- Interest on your balance / year
- $511.62
How this calculator works
- APY = (1 + APR ÷ n)ⁿ − 1, where n is compounding periods per year. 5% APR compounded daily is 5.13% APY; the more frequent the compounding, the bigger the (modest) boost.
APY = (1 + APR/n)ⁿ − 1
Frequently asked questions
Why do banks quote APY for savings but APR for loans?
Marketing: APY is the larger number, flattering for deposits; APR is the smaller one, flattering for debt. Regulation (Truth in Savings / Truth in Lending) mandates which is disclosed where.
Does daily vs monthly compounding matter much?
Barely — at 5%, daily beats monthly by about 1 basis point of APY. Chasing a higher headline rate matters far more than compounding frequency.
Is APY guaranteed?
Savings APYs float with the market and can change any day; CD APYs are locked for the term.
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Disclaimer: Results are estimates for educational purposes only and are not tax, legal, or financial advice. Tax rules are simplified (credits, phase-outs, and local taxes may not be modeled). Verify important decisions with the IRS, your state tax authority, or a licensed professional.