What is APR vs APY?
APR (Annual Percentage Rate) is the simple interest cost over a year — used for loans/credit cards. APY (Annual Percentage Yield) accounts for compounding — used for savings/investments. A 5% APR compounded monthly equals 5.12% APY. Higher compounding frequency = larger APR/APY gap.
More context
APR (Annual Percentage Rate) is the simple interest cost over a year — used for loans/credit cards. APY (Annual Percentage Yield) accounts for compounding — used for savings/investments. A 5% APR compounded monthly equals 5.12% APY. Higher compounding frequency = larger APR/APY gap. The exact answer depends on your specific situation — the numbers above are a strong starting point, but the right next step is to plug in your actual figures.
For a deeper analysis, use one of the related tools below — they take your specific income, debt, location, and goals as inputs and produce a tailored answer.