APR vs APY Converter
Convert nominal rates to effective rates and back.
APY is the rate you actually earn or pay after compounding within a year. APR is the simple rate before compounding. The more often interest compounds, the larger the gap between the two.
About
APR is the simple annual rate. APY is what you actually earn or pay once compounding kicks in. This tool converts between them at any compounding frequency, which matters whenever you compare a credit card rate to a savings account rate or a stated loan rate to its true cost.
How to use
- Pick whether you have an APR or an APY.
- Enter the rate.
- Pick how often interest compounds.
- Read the converted rate.
FAQ
Why are APR and APY different?+
APR ignores compounding. APY includes it. A 12% APR compounded monthly is actually 12.683% APY because each month's interest itself earns interest.
Which one should I use to compare loans or savings?+
APY (or EAR) for an apples-to-apples comparison. Two products with the same APR but different compounding schedules pay or cost different amounts.