APR to APY Converter
Convert Annual Percentage Rate (APR) to Annual Percentage Yield (APY). Understand the real return on your savings with compound interest.
APR (Annual Percentage Rate) and APY (Annual Percentage Yield) both measure interest rates, but APY accounts for compound interest. When comparing savings accounts or investments, APY gives you the true annual return. This calculator converts APR to APY based on compounding frequency.
Calculator
Common use cases
- Comparing savings accounts
- Understanding CD rates
- Evaluating investment returns
- Financial education
How to use
- Enter the APR (Annual Percentage Rate)
- Select how often interest compounds
- View the equivalent APY
FAQ
What's the difference between APR and APY?
APR is the simple annual rate without compounding. APY includes the effect of compound interest and shows the actual return.
Which is higher, APR or APY?
APY is always equal to or higher than APR because it includes compound interest effects.
Why do banks advertise APY for savings?
APY shows a higher number due to compounding, making the rate look more attractive to savers.
This calculator provides illustrative estimates for planning purposes only and does not constitute financial, tax, or legal advice.