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APR to APY Converter (and back)

Convert between APR (nominal rate) and APY (effective yield) for any compounding frequency — daily, monthly, quarterly, annually, or continuous.

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APY
6.1678%
At 6% APR, APY by compounding frequency:
FrequencyAPY
Annually6.0000%
Semi-annually6.0900%
Quarterly6.1364%
Monthly6.1678%
Daily6.1831%
Continuous6.1837%

APR is the nominal rate stated on the loan or account. APY is what you actually earn (or pay) once compounding is factored in. For a fair comparison between two products, always compare APYs.

Frequently asked

What is the difference between APR and APY?

APR (Annual Percentage Rate) is the stated nominal rate without compounding. APY (Annual Percentage Yield) is what you actually earn or pay after compounding. At 6% APR compounded monthly, the APY is 6.17%.

Why does compounding frequency matter?

More frequent compounding means interest earns interest sooner. Daily compounding of 6% APR gives 6.183% APY; annual compounding gives exactly 6%. The gap grows quickly at higher rates.

What is continuous compounding?

The mathematical limit as compounding frequency approaches infinity. APY = e^APR − 1. At 6%, continuous compounding gives 6.184% APY — essentially the same as daily. Used in bond math and options pricing.

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