APR to APY Calculator
Convert APR to APY across annual, quarterly, monthly, and daily compounding.
Every calculation runs locally in your browser. Nothing you enter here is sent to a server or stored anywhere.
For informational and educational purposes only — not financial, investment, or tax advice, and not a substitute for consulting a qualified professional about your specific situation. TrueMeasureKit is not liable for decisions made based on these results. See our Terms of Service.
APR vs. APY — why the same rate isn't the same return
APR (Annual Percentage Rate) is a simple, un-compounded annual rate — useful for comparing loan costs, but it ignores how often interest is actually applied. APY (Annual Percentage Yield) accounts for compounding, so it's always slightly higher than APR whenever interest compounds more than once a year. The more frequently interest compounds — daily beats monthly beats annually — the bigger that gap gets, which is why savings accounts advertise APY (it looks better) while loans advertise APR (it looks lower).
Frequently asked questions
Why are APR and APY different numbers for the same rate?
APR is the simple annual rate before compounding. APY accounts for how often interest compounds within the year, so it's always equal to or higher than the APR at the same nominal rate — the more frequent the compounding, the bigger the gap.
Which one do lenders and banks typically advertise?
Loans and credit cards are usually quoted in APR (required by US truth-in-lending disclosure rules). Savings accounts and CDs are usually quoted in APY, since a higher-looking number is more attractive to savers.