Convert a nominal interest rate (APR) to the real annual yield (APY) for any compounding frequency.
| Input | Result |
|---|---|
| 5% APR, monthly | 5.1162% APY |
| 5% APR, daily | 5.1267% APY |
| 5% APR, yearly | 5.0000% APY |
APR is the nominal yearly rate without compounding; APY includes the effect of compounding, so it is the rate you actually earn.
More frequent compounding gives a higher APY for the same APR, daily beats monthly beats yearly.
No. With any positive rate and at least one compounding period, APY is equal to or higher than APR.
APY exists precisely to make different compounding schedules comparable: a 5% rate paid yearly and a 4.9% rate paid daily are not the same deal, and APY is the single number that reconciles them. When two banks quote APYs, compare those directly, no further adjustment needed. This calculator's job is the other direction: when a contract or disclosure quotes only a nominal rate and a compounding schedule, it converts that pair into the APY you can line up against everyone else's.
At realistic savings rates the differences are small but real: a 5% nominal rate is 5.000% APY compounded yearly, 5.1162% monthly, 5.1267% daily. That is about 13 basis points between the extremes — enough to matter on a six-figure deposit over years, invisible on lunch money. At higher rates the gap widens: at 10% nominal, monthly compounding already adds about 47 basis points.
Savings and CD rates move with monetary policy. Rather than hard-coding a number that ages badly, our editorial team tracks the Federal Reserve's H.15 weekly release and re-reviews pages like this at least quarterly. If a bank is quoting you a rate, this calculator tells you what that rate is really worth once compounding is counted.
How this page is built and kept current. Written and fact-checked by the MoneyCalcsHub editorial team. We do not sell financial products and we accept no payment to change a result, the arithmetic on this page runs in your own browser from the numbers you type.
Official sources used on this page:
Source-dependent figures are reviewed when the cited issuer publishes an update. Worked examples show the formula applied to the listed inputs; interactive results are calculated in your browser.
Spotted an error? Write to [email protected], corrections are published on the page and the last-updated date changes with them. Full process: editorial policy.