APY & Compound Interest Calculator
Calculate your exact crypto staking returns by turning simple APR into compounding APY.
Future Balance
Total Profit Earned
+$105.16
Effective APY
10.52%
APR and APY are not the same number, and the gap between them is compound interest. A staking pool advertising 10% APR does not pay you 10% — it pays you more, if rewards compound. This calculator converts one into the other and shows you exactly what your balance becomes over time.
APR vs APY — the difference that matters
APR (Annual Percentage Rate) is the simple, headline rate. It assumes you earn your rewards and do nothing with them. APY (Annual Percentage Yield) assumes you reinvest those rewards, so they start earning too. Your rewards earn rewards, and that snowball is what separates the two numbers. At 10% APR compounded daily, the real APY is 10.52%. At 100% APR compounded daily, the APY is 171.5%. The higher the rate and the more frequent the compounding, the wider the gap becomes. This matters because protocols quote whichever number looks better. Always check which one you are being shown, and whether compounding is automatic or something you must do manually.
The formula
Future Value = P × (1 + r/n)^(n×t)
APY = (1 + r/n)^n − 1
Where:
P = principal r = APR as decimal
n = compounds/year t = years
Example: $1,000 at 10% APR, daily compounding, 1 year
1000 × (1 + 0.10/365)^365 = $1,105.16 → APY = 10.52%Notice that n appears twice — in the rate and in the exponent. That is why compounding frequency has a real effect, but a diminishing one: daily vs monthly matters much less than monthly vs yearly.
Reading staking offers honestly
- 1Always ask whether compounding is automatic. Many protocols quote APY but require you to manually claim and restake — if you do that once a month instead of daily, you get the monthly APY, not the daily one.
- 2Gas fees can destroy manual compounding. If restaking costs $5 and your daily reward is $2, compounding daily loses you money. Compound when the reward meaningfully exceeds the cost.
- 3Very high advertised APYs are usually paid in a project's own token. If that token's price halves while you earn, your 200% APY is worth far less than the number suggests.
- 4Compounding frequency has diminishing returns. Daily vs hourly is nearly identical. Yearly vs monthly is a real difference. Do not overpay in gas chasing a fraction of a percent.
- 5Lock-up periods are a hidden cost. A 15% APY that locks your funds for 90 days is not obviously better than 10% you can exit any time — especially in a volatile market.
Frequently asked questions
Which is better, APR or APY?
Neither is 'better' — they measure different things. APY is always the higher number when compounding exists, because it includes the compounding effect. When comparing two offers, make sure you are comparing like with like: APY against APY, or APR against APR.
Why is my actual return lower than the advertised APY?
Usually one of three reasons: the rate dropped after you deposited (most staking rates are variable), compounding was not automatic and you did not do it manually, or the reward token's price fell. The advertised APY assumes a fixed rate and constant token price — neither is guaranteed.
What compounding frequency should I choose?
Whatever your protocol actually does. Look it up rather than guessing. Most liquid staking is daily or continuous. Many farms accrue continuously but only compound when you claim. If it is manual, use the frequency you will realistically maintain.
Does this account for taxes or impermanent loss?
No. This is pure compound interest math. If you are staking in a liquidity pool, impermanent loss applies separately and can be substantial. Staking rewards are also taxable income in most jurisdictions at the moment you receive them.
Is high APY a red flag?
It is a signal to look harder, not an automatic no. Sustainable yield comes from real revenue — trading fees, lending interest, protocol income. If you cannot identify where the yield comes from, it is likely coming from token inflation, and that is a transfer from future holders to you, not genuine return.