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| APR | Monthly APY | Daily APY |
|---|---|---|
| 1% | 1.005% | 1.005% |
| 2% | 2.018% | 2.020% |
| 3% | 3.042% | 3.045% |
| 4% | 4.074% | 4.081% |
| 5% | 5.116% | 5.127% |
| 6% | 6.168% | 6.183% |
| 8% | 8.300% | 8.328% |
| 10% | 10.471% | 10.516% |
| 15% | 16.075% | 16.180% |
| 20% | 21.939% | 22.134% |
| 25% | 28.073% | 28.392% |
The formula
APY = (1 + APR ÷ n)n − 1, where n is the number of compounding periods a year. A 5% APR compounded monthly is a 5.116% APY; compounded daily it is 5.127%.
Why both exist
US rules require banks to quote APY on savings accounts (Truth in Savings Act, Regulation DD) and lenders to quote APR on loans (Truth in Lending Act, Regulation Z). APR on a loan also includes some fees, so it can be higher than the note rate.
Frequently asked questions
What is the difference between APR and APY?
APY includes the effect of compounding within the year; APR does not.
Is APY always higher than APR?
It is equal with annual compounding and higher with more frequent compounding.
Which should I compare?
Compare APY with APY for savings and APR with APR for loans.