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Convert between the stated rate and the effective annual rate at any compounding frequency.
Savings accounts usually compound daily or monthly. Credit cards typically compound daily.
| Compounding | Times / year | APY |
|---|---|---|
| Annually | 1 | 5% |
| Semi-annually | 2 | 5.062% |
| Quarterly | 4 | 5.095% |
| Monthly | 12 | 5.116% |
| Daily | 365 | 5.127% |
APR is the simple stated rate: the periodic rate multiplied by the number of periods, ignoring compounding. APY (also called effective annual rate) includes compounding — interest earning interest — so it's always equal to or higher than the APR for the same rate. Banks quote savings accounts in APY because it's the bigger number, and quote loans in APR because it's the smaller one. The more often interest compounds, the wider the gap.
Worth connects your real accounts and runs the numbers for you — budgets, net worth, goals, and an AI assistant.
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