Overview
Enter a rate and choose any two compounding periods - daily, monthly, quarterly, semi-annually, or annually - to convert that rate into the equivalent rate at the other period, using i2 = (1 + i1)^(m1/m2) − 1, where m1 and m2 are the number of compounding periods per year for the "from" and "to" selections. Two rates are equivalent when they compound to the exact same effective return over a year - a 1% monthly rate, for instance, is equivalent to roughly 12.6825% compounded annually, since compounding 1% twelve times produces slightly more growth than a flat 12%. This generalizes the site's APY Calculator, which only converts a nominal rate into its once-a-year effective rate (APY): this tool lets either side of the conversion be any period, not just "to annual," so it also handles conversions like an annual rate down to its equivalent quarterly rate, or a quarterly rate up to its equivalent semi-annual rate. Useful for comparing financial products quoted with different compounding conventions, or converting a rate to match another calculator's expected input period. Runs entirely client-side, and this is an informational estimate, not financial advice.
Best for: Comparing a monthly-quoted rate against an annual-quoted rate on an apples-to-apples basis
How to use this tool
- Enter the rate (%). The periodic rate you already have, at the "from" period below.
- Choose the "from" and "to" periods. Daily, monthly, quarterly, semi-annually, or annually - either side can be any of the five.
- Read the equivalent rate. The rate at the "to" period that compounds to the exact same effective annual return.
Frequently asked questions
The APY Calculator only converts a nominal rate into its once-a-year effective rate (a fixed "convert to annual" operation). This tool generalizes that: either the "from" or "to" period can be any of daily, monthly, quarterly, semi-annually, or annually, so it also handles conversions the APY Calculator doesn't, like annual-to-quarterly or quarterly-to-semi-annual.
Because compounding 1% twelve times means each month's interest also earns interest in later months, not just the original principal. That compounding effect pushes the equivalent annual rate to roughly 12.6825% rather than exactly 12%, which would be the case only without compounding.
No - the same formula works in either direction. Converting monthly to annual and then converting that annual result back to monthly (with "from" and "to" swapped) returns you to the original monthly rate, since the two rates are defined as producing an identical effective annual return.