APY Calculator
Convert a nominal APR into the effective APY — and back again — for daily, monthly, quarterly or annual compounding, with optional growth of a deposit over time.
APY = (1 + r ÷ n)^n − 1, with r the nominal APR and n the compounding periods per year. For any nominal rate above zero, APY is strictly greater than APR whenever money compounds more than once a year — 12% nominal compounded monthly is 12.6825% effective — and the gap widens with frequency (daily here uses 365 periods). Savings ads quote APY because it is the rate your money actually grows at; loans quote APR.
This tool runs entirely in your browser. Your data never leaves your device — it is not uploaded to any server.
How to use
- 1Type the rate you were quoted — a nominal APR or an effective APY.
- 2Pick the compounding frequency: daily, monthly, quarterly or annually.
- 3Optionally add a deposit and the number of years to project growth.
- 4Read the converted rate, the final balance and the interest earned.
APY Calculator
A nominal rate and an effective rate are not the same number, and ads quietly pick whichever looks better. Enter a rate and a compounding frequency — daily (365), monthly, quarterly or annually — and this calculator converts APR into APY, or APY back into the nominal APR that would produce it.
Add an optional deposit and a horizon in years to see what the money actually grows into: the balance after compounding and the interest earned on top. The conversion is exact both ways, so you can flip the direction and verify the round trip against any bank quote.
Frequently asked questions
Why is APY higher than APR for the same nominal rate?
Because compounding pays interest on interest. APY = (1 + r ÷ n)^n − 1, so a 12% nominal rate compounded monthly becomes (1.01)^12 − 1 = 12.6825% effective: the extra 0.6825 points is the interest your interest earns. The more often money compounds, the wider the gap — daily beats monthly, monthly beats annual.
Which rate should I compare between banks?
Compare APY against APY for savings and CDs — it already folds the compounding frequency in, so a 5.10% APY compounded monthly is genuinely better than a 5.05% APY compounded annually. For loans, compare APR against APR. Mixing an APR with an APY in one comparison is exactly how quotes mislead.
Does the daily option use 365 or 360 days?
This calculator uses 365 periods per year, the convention most consumer savings accounts follow. Some financial products annualize on a 360-day basis instead, which shifts the effective rate slightly — if the fine print says 360, treat the result as a close approximation rather than an exact quote.
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