APY ↔ APR Converter (Compounding)
Convert between APR and APY for any compounding frequency — the true yield once compounding is counted.
APR is the simple annual rate; APY (effective annual yield) includes compounding. A 12% APR compounded daily is 12.75% APY. DeFi protocols often advertise APY (the bigger number); the more frequent the compounding, the larger APY exceeds APR. Always compare like-for-like.
Formula
Note: This is a technical utility, not financial advice. Crypto assets are volatile and risky; do your own research and consult a licensed professional before making decisions.
Disclaimer: This tool is for general informational and estimation purposes only and is not professional financial, tax, accounting or legal advice. All figures are estimates — verify with a qualified professional before making decisions. Read the full disclaimer.
About APY ↔ APR Converter (Compounding)
The APY/APR converter cuts through one of finance's most exploited ambiguities: APR is the simple annual rate, while APY (annual percentage yield) includes the effect of compounding — and the gap between them grows with how often interest compounds. This calculator converts either way for any compounding frequency (daily, monthly, hourly), showing exactly how much compounding adds. It's essential for comparing DeFi staking yields, savings products and lending rates honestly, since protocols advertise whichever number looks bigger — usually the compounded APY — and a fair comparison requires converting them to the same basis.
How to use APY ↔ APR Converter (Compounding)
- 1Enter your values into APY ↔ APR Converter (Compounding) — sensible, domain-typical defaults are pre-filled so you see a real result immediately.
- 2The result recomputes live using the formula shown on the page; there is no button to press.
- 3Adjust any input to compare scenarios, then read the worked example to see the substituted numbers.
Why use APY ↔ APR Converter (Compounding)?
- ✓Computes APY ↔ APR Converter (Compounding) instantly in your browser — no sign-up, no upload, no server round-trip.
- ✓100% free and unlimited, with the exact formula shown: APY = (1 + APR/n)ⁿ − 1.
- ✓Runs entirely client-side, so every value you enter stays private on your device.
- ✓Live recompute as you type, with a worked example and authoritative references for trust.
Frequently asked questions
What's the difference between APR and APY?+
APR is the simple annual interest rate ignoring compounding; APY (or EAR, effective annual rate) is what you actually earn once interest compounds on itself. A 12% APR compounded daily yields 12.75% APY. APY is always ≥ APR, and they're equal only with no compounding (annual). Lenders advertise the low APR; depositors are shown the high APY.
Why does compounding frequency matter so much?+
More frequent compounding earns interest on interest sooner, raising the effective yield. The same 12% APR is 12.68% APY monthly, 12.75% daily, and 12.7497% continuously — diminishing returns, but real. In DeFi where 'auto-compounding' happens many times daily, this gap is meaningful, and the headline APY assumes you actually reinvest every period.
Which number should I compare across products?+
Always compare like-for-like — convert everything to APY (or everything to APR). Comparing one product's APR against another's APY is the apples-to-oranges trap that makes the APY product look better than it is. This tool lets you normalize both to the same basis before deciding.
Are advertised DeFi APYs reliable?+
Treat them cautiously. A high APY often assumes constant rates and perfect auto-compounding, but DeFi yields fluctuate with pool usage and token prices, and 'APY' sometimes includes volatile reward-token emissions whose value can collapse. The compounding math here is exact; whether the underlying rate persists is the risk — which is why this is a technical tool, not financial advice.
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