5% APR with Daily Compounding — APY Conversion
A 5% APR compounded daily yields an APY of approximately 5.13%, slightly more than monthly compounding.
How to use this tool
- Enter apr and compounding frequency in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your apy and the full breakdown beneath it.
Daily compounding is common with savings accounts — see how it affects the effective annual rate.
Frequently asked questions
- What is the difference between APR and APY?
- APR (Annual Percentage Rate) is the simple annual rate. APY (Annual Percentage Yield) accounts for compounding within the year, so it's always greater than or equal to APR. The more frequently interest compounds, the larger the gap.
- Why does compounding frequency matter?
- More frequent compounding means interest earns interest sooner. Daily compounding produces a higher APY than monthly compounding for the same APR.