Convert a stated (nominal) APR into the Annual Percentage Yield (APY) that reflects compounding. Compare savings accounts and CDs on an apples-to-apples basis.
Estimates only. This tool is provided for educational purposes and is not financial advice. It models the figures you enter — it does not know your credit terms, local taxes, or fees. Talk to a licensed adviser before making a decision.
A 5.00% APR compounded daily.
APY: 5.127% — slightly above the 5.00% nominal rate because of daily compounding.
APR is the stated yearly rate without compounding; APY (Annual Percentage Yield) includes compounding, so it's the real rate you actually earn or pay. The more frequent the compounding, the larger the gap.
APY = (1 + APR/n)n − 1
Why is APY higher than APR?
Because APY counts interest-on-interest from compounding. The difference grows with both the rate and the compounding frequency.
Which should I compare when saving?
Always compare APY — it reflects what you'll actually earn. Two accounts with the same APR can pay different APYs.
What about APY for loans?
For borrowing, the comparable figure is APR (which includes fees). APY is mainly used for deposits and investments.