Quick answer: APR generally describes an annualized borrowing rate, while APY generally describes annualized yield including the effect of compounding under its stated assumptions.
APR: borrowing cost
APR is commonly used for loans and credit cards. The exact cost of borrowing also depends on balances, fees, transaction type, compounding or periodic-rate mechanics, and account terms.
APY: savings yield
APY helps compare deposit-account yields because it reflects compounding under the account's stated assumptions. A higher APY does not automatically make an account better if fees, access restrictions, minimums, or other terms work against your goal.
Why the numbers cannot simply be swapped
A rate advertised on debt and a yield advertised on savings answer different questions. Always compare like with like and read the underlying terms.
Next steps
Read APR Explained, the HYSA guide, and CD guide.
Methodology and limitations
This guide explains general financial concepts and decision factors rather than prescribing one answer. Product terms, tax treatment, credit practices, rates, and laws can change. Verify current rules with the relevant financial institution, plan administrator, or government source before acting.
Reviewed September 26, 2026. General financial education only; not individualized financial, tax, legal, investment, or credit advice.