APR expresses the nominal interest rate before compounding. Comparing APRs helps keep apples-to-apples across products.

Can I use daily compounding?

Yes—set compounds per year to 365.

finance calculator

APY to APR Converter

Convert advertised APY into the equivalent APR based on compounding frequency.

Results

Equivalent APR: 4.41%

How to use this calculator

Enter APY and the number of compounding periods per year.
We invert the compound formula to get nominal APR.
Use the APR to compare against products that quote nominal rates.

Inputs explained

APY: Annual percentage yield that includes compounding.
Compounds per year: How often interest is compounded (12 monthly, 365 daily, etc.).

How it works

We invert the compound interest formula to solve for APR given APY and compounding frequency.

Higher compounding counts create a larger gap between APR and APY.

Formula

APR = m × [(1 + APY)^(1/m) − 1]
Where m = compounds per year

When to use it

Comparing savings products advertising APY to loans or offers quoted in APR.
Normalizing yields for financial models that require nominal rates.
Checking marketing claims by converting posted APY back to APR.

Tips & cautions

Daily compounding is common for bank APY; set m=365 for that scenario.
Higher compounding frequency increases APY relative to APR; this reverses it.
Ensure APY is expressed as a decimal/percentage consistently with APR expectations.
Assumes constant compounding with no tiered rates or promo periods.
Ignores fees, minimum balances, or day-count conventions that alter effective yield.
Single APY input; does not support blended or step-up yields.

Worked examples

4.5% APY, monthly compounding

APR ≈ 4.41%

Same APY, quarterly compounding

APR ≈ 4.33%
Less frequent compounding narrows the spread.

Deep dive

This APY to APR calculator converts advertised annual percentage yield into nominal APR using the compounding frequency. Enter APY and periods per year to compare accounts that quote APY against rates quoted as APR.

Use it for savings accounts, CDs, or marketing checks. It assumes steady compounding with no fees or tiers.

FAQs

Why does APR matter?: APR expresses the nominal interest rate before compounding. Comparing APRs helps keep apples-to-apples across products.
Can I use daily compounding?: Yes—set compounds per year to 365.

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For informational use. Always review official disclosures for financial products.