5% APR to APY with Daily Compounding
A 5% APR compounded daily results in an APY of approximately 5.13%, slightly higher 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.
See how daily compounding on a 5% APR produces a marginally higher APY than monthly compounding.
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.