The gap is real but smaller than the marketing suggests. A 4.5% APR on $10,000 held for a year pays $450.00 compounded annually, $455.06 semiannually, $457.65 quarterly, $459.40 monthly and $460.25 daily — so moving from annual to daily compounding is worth $10.25, about 2% more interest. Worth having, and worth understanding, but not worth choosing a worse rate for: a 4.4% account compounding daily still loses to a 4.5% one compounding annually. Compare the APY figures rather than the frequencies, which is exactly what APY exists for.
APR is the stated interest rate; APY is what you actually earn once compounding is factored in. Banks are required to disclose APY specifically so you can compare accounts on equal footing — always compare offers by APY, not the advertised APR.
At typical savings rates, the gap between monthly and daily compounding is usually a fraction of a basis point — not the dramatic difference marketing sometimes implies. The APR itself matters far more than how often it compounds.
Simple mode converts one APR to APY instantly. Growth mode projects your balance forward over a chosen time horizon. Compare mode puts two APR/compounding combinations side by side so you can see which one actually earns more.
Growth mode shows the total interest earned and final balance at the end of your chosen time horizon — a single cumulative total, not a year-by-year breakdown. For a month-by-month or year-by-year savings trajectory, use the Savings Calculator instead.
This converts a stated rate into a true yield — it does not account for taxes on interest earned, account fees, or promotional rates that expire after an introductory period. Enter the rate that will actually apply for the period you care about.
Instant Conversion: Convert APR to APY based on compounding.
Real Earnings: See actual interest earned on principal.
Comparison: Visualize APR vs APY differences.
Export: Download the calculation as JSON, CSV or a branded PDF — no account needed.
Savings Comparison: convert APR to APY for savings accounts and compare offers with different compounding periods.
Investments: see effective annual yield with compounding and compare returns on the same basis.
CD Planning: compare CD APY across terms and banks and understand true yield after compounding.
Loan Analysis: compare APRs with different compounding and export or copy for records.
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