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APR to APY Calculator

Convert between nominal APR and effective APY for different compounding frequencies such as monthly, daily, and annually.

Conversion direction

Choose whether your input is a nominal APR or an effective APY. Then set the compounding frequency.

Inputs

APR to APY calculatoreffective annual rate calculator

Results

Nominal APR
5%
Effective APY
5.1162%
Periodic rate
0.4167% per period
Compounding periods / year
12
Projected value (principal + years)
10,511.618979
Projected growth
511.618979

How to use this tool

  1. Select whether your starting rate is quoted as APR or APY.
  2. Choose how often interest is compounded each year.
  3. Enter the rate and read off the converted APR and APY values.

APR to APY converter for savings and loans

  • Understand how a nominal APR translates into an effective annual yield when compounded.
  • Compare offers that quote different compounding frequencies on a like-for-like basis.
  • Useful for savings accounts, credit cards, and fixed-term deposits.

Formulas behind the effective annual rate

  • APY = (1 + APR / n)^n - 1, where n is the number of compounding periods per year.
  • APR = n × ((1 + APY)^(1/n) - 1) when converting back from an effective annual rate.
  • Assumes the same rate applies for every period and no additional fees.

FAQ

Why is APY higher than APR for positive rates?
Because interest is being earned on interest each compounding period, the effective annual yield (APY) is higher than the nominal APR when compounding occurs more than once per year.
Which rate should I compare when shopping for accounts?
Effective APY is usually the best basis for comparison across products with different compounding frequencies.
Can this handle negative interest rates?
Yes, the formulas work for negative rates too, though these are less common in everyday banking products.

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