APY Calculator
Convert between APR and APY using the compounding frequency, then see what that yield means in dollars. A savings account advertising 4.25% APR with daily compounding works out to about 4.34% APY—roughly $64 in interest on a $1,500 balance in one year if you leave it untouched. Compare frequencies below.
Conversion Settings
Convert between nominal and effective rates.
Conversion Result
Effective annual and monthly rates.
APY (Monthly (12x/yr))
5.1162%
From APR of 5.0000%
Effective Monthly Rate
0.4167%
per month
Equivalent APY by Compounding Frequency
| Frequency | Equivalent APY |
|---|---|
| Daily (365x/yr) | 5.1267% |
| Monthly (12x/yr) | 5.1162% |
| Quarterly (4x/yr) | 5.0945% |
| Semi-Annual (2x/yr) | 5.0625% |
| Annually (1x/yr) | 5.0000% |
| Continuously | 5.1271% |
Highlighted row matches your selected frequency.
Methodology and limitations
Last reviewed:
Methodology
Converts between APR and APY using the selected compounding frequency, treating APR as the nominal annual rate and APY as the effective annual rate after compounding.
Limitations
Educational rate conversion only. It does not replace account disclosures, loan disclosures, fees, penalties, taxes, promotional rates, or institution-specific compounding rules.
How APY Is Calculated
Convert between APR and APY using the compounding frequency, then see what that yield means in dollars. A savings account advertising 4.25% APR with daily compounding works out to about 4.34% APY—roughly $64 in interest on a $1,500 balance in one year if you leave it untouched. Compare frequencies below.
Method used
This calculator converts between APR and APY by applying the selected compounding frequency. APR is treated as the nominal annual rate, while APY is the effective annual rate after compounding.
APY = (1 + APR / n)^n - 1
Practical example
Example: a 5.00% APR compounded monthly has an APY of about 5.116%, because interest is added 12 times during the year.
- 5.00% APR
- Monthly compounding
- APR to APY conversion direction
The output shows the equivalent APY, effective monthly rate, and a comparison table across compounding frequencies.
Assumptions
- The entered rate is annualized.
- The selected compounding frequency stays constant for the comparison.
- Continuous compounding uses the exponential-rate formula.
What this includes
- APR to APY conversion, APY to APR conversion, compounding frequency comparison, and effective monthly rate.
What this excludes
- Fees, promotional rate changes, taxes, early withdrawal penalties, loan disclosures, and account-specific compounding rules.
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Frequently Asked Questions
What is APY?
APY (annual percentage yield) is the effective yearly return after compounding. On $10,000 at 4.25% APR with daily compounding, APY is about 4.34%, so you earn roughly $434 in one year if you leave the balance untouched. Banks must disclose APY on deposit products so you can compare accounts fairly across daily, monthly, or quarterly compounding.
How is APY different from APR?
APR is the nominal stated rate before compounding; APY includes compounding. At the same nominal rate, more frequent compounding raises APY. Example: 5% APR compounded monthly yields about 5.12% APY - roughly $256 on a $5,000 balance over one year. Use APY to compare savings products apples to apples.
Why does compounding frequency matter?
Interest posts sooner, so later interest compounds on a larger balance. At 6% APR, monthly compounding yields about 6.17% APY while daily compounding yields about 6.18% APY - a small gap that grows with rate, balance, and time. On $50,000 at 4% with daily compounding, one-year interest is roughly $2,040 at ~4.08% APY. Compare daily, monthly, quarterly, annual, and continuous frequencies in this calculator.
Can this convert APY back to APR?
Yes. Switch the conversion direction to estimate the nominal APR that corresponds to a given APY and compounding frequency. This is useful when a savings product advertises APY but you need the underlying APR for loan comparisons or financial modeling. The reverse calculation accounts for how many compounding periods occur per year, so the result is not simply subtracting a fixed amount from APY.
What is a good APY for a savings account?
As of 2026, high-yield online savings accounts may offer APYs between 4% and 5%, while traditional brick-and-mortar banks often pay well under 1%. CDs and money market accounts vary by term and institution. Always compare APY - not the advertised interest rate - when shopping for deposit products, and confirm whether the rate is promotional or ongoing before moving your money.