APR to APY calculator

Two offers with the same rate can cost different amounts. The difference is how often interest is charged or paid.

The effective annual rate puts everything on the same footing: it is what you really pay or earn in a year. Pick the rate you have and we show you the other one.

How it's calculated

APY = (1 + APR ÷ m) to the power of m, minus 1. Here m is the number of compounding periods per year: 12 for monthly, 4 for quarterly.
APR = m × ((1 + APY) to the power of 1 ÷ m, minus 1).
The rate per period is the APR divided by m.

An example

An APR of 12% compounded monthly is an APY of 12.68%.

An APY of 10% is an APR of 9.57% when interest compounds every month.

Frequently asked questions

What is the difference between APR and APY?

APR is the yearly rate before compounding. APY includes the effect of interest earning interest. That is why APY is always equal to or higher than APR.

Which one should I use to compare offers?

APY for savings, because it shows what you really earn. For loans, compare the effective rate and also the total cost with fees included.

Why does more frequent compounding raise the effective rate?

Interest is added to the balance sooner and starts earning interest of its own. With yearly compounding, APR and APY are the same.