Enter any nominal APR and compounding frequency to see the true effective APY — and compare all compounding frequencies side by side to see which earns the most.
APR (Annual Percentage Rate) is the stated nominal rate. APY (Annual Percentage Yield) is the effective rate after compounding is applied. Banks advertise APY on savings accounts (because it looks higher) and APR on loans (because it looks lower). Always compare savings accounts by APY and loans by APR. At 5.5%, daily compounding produces an APY of 5.654% — 0.154% more than the stated rate.