DollarWise

Free APY to APR Converter

October 12, 2026 · 2 min read · By the DollarWise team

How it works

APR is the simple yearly rate; APY is what you actually earn (or pay) once compounding is included. Pick a direction, enter a rate, and choose a compounding frequency — the converter gives you the equivalent rate plus a side-by-side table of the same rate under every compounding schedule.

APY to APR Converter

Convert APR to APY (or back) for any compounding schedule — and see all five side by side.

100% Free Forever No Sign-up No Credit Card Private — files never leave your browser Unlimited Use

1 Direction and rate

2 Compounding frequency

Savings accounts usually compound daily or monthly; most loans compound monthly.

3 Convert & compare

🔁 Conversion result

🎉 Free forever. No sign-up. No credit card. No limits.

This tool runs entirely in your browser — convert as many rates as you like.

How the math works

Compounding means each interest payment itself starts earning interest. To convert APR to APY: APY = (1 + APR ÷ m)^m − 1, where m is the number of compounding periods per year. To go the other way: APR = m × ((1 + APY)^(1/m) − 1). With annual compounding (m = 1) the two rates are identical; the more often interest compounds, the wider the gap grows.

Everyday uses

  • Comparing savings accounts: banks advertise APY, so convert a loan-style APR quote to APY for a fair comparison.
  • Credit card reality check: most cards compound daily — see what a 24% APR really becomes over a year.
  • Comparing CD offers: two CDs with the same APR but different compounding do not pay the same; APY settles it.

Frequently asked questions

Which is bigger, APR or APY? For the same underlying rate, APY is always equal to or bigger than APR, because APY includes the effect of compounding. They only match when interest compounds once a year.

Why do banks quote APY for savings but APR for loans? US law requires it: the Truth in Savings Act makes banks disclose APY on deposits so savers can compare earnings, and the Truth in Lending Act requires APR on loans so borrowers see the borrowing rate.

Does compounding frequency really matter? At low rates the difference is pennies, but it grows with the rate. On a 25% credit card APR, daily compounding adds roughly another 3 percentage points of effective cost over a year.