● Monthly ⇄ annual · Nominal (APR) ⇄ effective annual rate (APY)

Convert a rate monthly to annual (and annual to monthly)

Q: Is this an exchange rate converter?

No. This page converts an interest rate from one period to another — monthly to annual, annual to monthly, daily, weekly, quarterly, semi-annual — and between nominal (APR) and effective (APY) rates. It does not convert currencies, so it will not turn dollars into euros, and it has nothing to do with gold rates, sample rates in audio, or radio control rates. If you landed here looking for a currency exchange rate, a live foreign exchange service is what you need instead.

Enter any rate and period — instantly convert to daily, weekly, monthly, quarterly, and annual effective rates.

A 1% monthly rate equals 12.68% per year (effective), not 12% — because compounding matters. This converter shows all equivalent rates across all periods, and converts between nominal (stated) and effective (real) rates.

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Rate Converter

Enter rate + period → see all equivalent rates

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Input rate

Interest rate

This rate is per

Rate type

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Equivalent rates (effective)

Nominal annual rate (APR): —
Effective annual rate (APY): —

How it's calculated

Nominal vs effective rate conversion

The effective rate for any period is calculated by finding the equivalent daily rate first, then compounding to the target period.

Step 1: Find effective rate per input period If input is "effective": r_period = input rate If input is "nominal annual": r_period = (1 + APR/n)^(1/n) − 1 Step 2: Convert to effective annual rate EAR = (1 + r_period)^n − 1 where n = compounding periods per year Step 3: Convert EAR to any target period r_target = (1 + EAR)^(1/n_target) − 1 Example: 1%/month effective EAR = (1.01)^12 − 1 = 12.6825% Daily = (1 + 12.6825%)^(1/365) − 1 = 0.03285%

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Nominal annual rate
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Effective annual rate (APY)
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Nominal rate (APR): The stated annual rate, divided equally across periods. Does not account for intra-period compounding. Used in most loan disclosures.
Effective rate (APY/EAR): The actual return including all compounding within the year. Always higher than or equal to the nominal rate. Used in savings account advertising.
Compounding: Earning interest on previously earned interest. More frequent compounding = higher effective rate for the same nominal rate.

🔢 Worked example

A nominal 12% annual rate compounded monthly (1% per month) actually equals a 12.68% effective annual rate: (1.01)^12 − 1 = 12.68%.

Disclaimer: assumes constant compounding. Some financial products use simple interest (no compounding) — check your specific product terms. Always confirm with an official source before deciding.

Frequently asked questions

How do I convert monthly to annual rate?

Effective annual rate = (1 + monthly rate)^12 − 1. Example: 1%/month → (1.01)^12 − 1 = 12.68%/year. Do NOT simply multiply by 12 — that gives the nominal rate (12%), not the effective rate (12.68%).

What is the difference between APR and APY?

APR (Annual Percentage Rate) is the nominal rate — stated without compounding. APY (Annual Percentage Yield) is the effective rate — it includes compounding. A savings account with 5% APR compounded monthly has 5.116% APY. Always compare APY between savings accounts.

How do I convert annual to monthly rate?

Monthly effective rate = (1 + annual rate)^(1/12) − 1. Example: 10% annual → (1.10)^(1/12) − 1 = 0.797%/month. Or for the nominal monthly rate: simply divide the APR by 12.

Is this an exchange rate converter?

No. This page converts an interest rate from one period to another — monthly to annual, annual to monthly, daily, weekly, quarterly, semi-annual — and between nominal (APR) and effective (APY) rates. It does not convert currencies, so it will not turn dollars into euros, and it has nothing to do with gold rates, sample rates in audio, or radio control rates. If you landed here looking for a currency exchange rate, a live foreign exchange service is what you need instead.

Why does a 12%/year loan cost more than 1%/month?

They're the same nominal rate, but a loan stated as "1% per month" compounds monthly, giving an effective annual rate of 12.68%. A "12% annual" loan compounded annually costs exactly 12%. The monthly-stated loan is slightly more expensive due to more frequent compounding.

About this calculator

This interest rate converter translates a rate stated for one period into its equivalent for every other period — monthly, annual, daily — and converts between nominal (stated) and effective (real) rates. It lets you compare quotes that are expressed differently so you are always weighing like against like.

The key insight is compounding: a 1% monthly rate is not 12% per year but about 12.68% effective, because interest earns interest. Use the converter whenever you need to compare a loan quoted monthly against one quoted annually, or to see the true effective cost hidden behind a nominal headline rate.

By Vinicius Fonseca · Reviewed against official sources · Updated Jul 2026 · How we calculate →