APR Calculator for Money Market Account

The Annual Percentage Rate (APR) is a key metric for money market accounts that shows the annual interest rate on your balance. This calculator helps you determine your APR based on your account balance and interest earned.

What is APR?

The Annual Percentage Rate (APR) represents the annual interest rate charged or paid on a loan or the interest earned on a deposit. For money market accounts, APR is calculated based on the interest earned over a 12-month period.

APR Formula

APR = (Interest Earned / Average Daily Balance) × 365 × 100

Where:

Interest Earned - The total interest earned during the period
Average Daily Balance - The average balance in the account during the period

APR vs. APY

APR and Annual Percentage Yield (APY) are often confused, but they measure different things:

APR	APY
Annual Percentage Rate	Annual Percentage Yield
Simple interest rate	Compound interest rate
Does not account for compounding	Accounts for compounding

For example, if your money market account has an APR of 2%, the APY would be higher because it accounts for compounding interest.

How to Calculate APR

To calculate APR for your money market account:

Determine your interest earned during the period
Calculate your average daily balance during the period
Use the APR formula: (Interest Earned / Average Daily Balance) × 365 × 100

Example: If you earned $10 in interest with an average daily balance of $5,000 over a year, your APR would be (10 / 5,000) × 365 × 100 = 7.3%.

Using the APR Calculator

Our APR calculator makes it easy to determine your money market account APR. Simply enter:

Your interest earned amount
Your average daily balance

The calculator will display your APR and show how it compares to other interest rates.

FAQ

What is the difference between APR and APY?: APR is the simple annual interest rate, while APY accounts for compounding interest, making it higher than APR.
How often is APR calculated for money market accounts?: APR is typically calculated annually based on your interest earned and average daily balance over the 12-month period.
Can APR be negative for money market accounts?: Yes, if you have a negative balance or the bank charges fees that reduce your interest earnings.
Is APR the same as the interest rate I see on my statement?: Not necessarily. Your statement may show the APY, which is higher than the APR due to compounding.
How can I improve my money market account APR?: Keep your balance high and avoid excessive withdrawals to maintain a high average daily balance.