What is APY vs APR?

APR, the annual percentage rate, is the simple yearly rate: 10% APR on $1,000 pays $100 over a year if the interest is taken out as it arrives. APY, the annual percentage yield, assumes the interest stays in and earns interest of its own, so it is the higher of the two for the same product whenever interest is paid more than once a year.

The gap depends on how often interest is added. A 10% APR paid daily and left in grows to 10.52% APY; paid monthly, 10.47%; paid once a year, exactly 10%. At the rates most savings products pay the difference is small: 5% APR paid daily is 5.13% APY.

Converting is one line of arithmetic. From APR to APY with n payments a year: APY = (1 + APR/n)^n − 1. Back from APY to APR: APR = n × ((1 + APY)^(1/n) − 1), so a 10% APY paid daily is a 9.53% APR.

Venues label their rates either way, and not always the same way across their own products. Binance and Bybit state APR on their savings products, OKX and Backpack state APY, and an onchain pool usually shows APY because its rewards accrue into the deposit. A rate quoted without the word is best read as APR, the smaller of the two meanings.

Compare like with like before comparing numbers. TrueHold’s earn rates pages say which basis each exchange product uses, next to its lockup and deposit limits, for USDC, ETH and eight other coins. Neither figure is a promise: both are today’s rate expressed over a year, and most rates change long before the year is out.