APR to APY Calculator
Convert between the stated rate and what you actually earn or pay.
APR is the stated rate and ignores compounding. APY is what you actually earn or pay once compounding is counted, which is why savings products advertise APY and loans advertise APR. Comparing one against the other is how people talk themselves into the worse product, so convert before you compare.
Worked example. 12% APR compounded monthly is 1% a month, which compounds to 12.6825% APY. The 0.68-point gap is what compounding adds. Compound daily instead and it reaches 12.7475%.
Frequently asked questions
What is the difference?
APR is the stated annual rate and ignores compounding within the year. APY includes it. They are equal only when interest compounds exactly once a year.
Why do savings accounts quote APY and loans quote APR?
Because each quotes the number that looks better. APY is the higher figure for a depositor; APR is the lower figure for a borrower. Neither is dishonest, but comparing one against the other is not a comparison at all.
Does credit card APR include compounding?
The quoted APR does not, but card interest typically compounds daily, so the effective rate you pay is higher. A 24% APR compounded daily is about 27.1% APY, which is a meaningful difference on a carried balance.
Which should I use to compare offers?
Convert both to the same basis. For savings, compare APY to APY. For loans, compare APR to APR, and check whether fees are included, since some APR quotes fold them in and others do not.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.