The nominal rate (APR) is not the rate you actually earn. What matters is the effective annual rate (EAR), which accounts for how often interest is credited and reinvested. The formula is EAR = (1 + r/n)^n − 1, where r is the nominal rate and n is compounding periods per year.

More frequent compounding helps, but with diminishing returns — the jump from annual to monthly matters far more than monthly to daily.

Annual (n=1): 5% nominal → 5.000% EAR
Monthly (n=12): 5% nominal → 5.116% EAR
Daily (n=365): 5% nominal → 5.127% EAR
Continuous (n→∞): 5% nominal → 5.127% EAR (e^0.05 − 1)

Frequency	EAR on 5% nominal	Extra vs annual
Annual	5.000%	—
Monthly	5.116%	+0.116%
Daily	5.127%	+0.127%

Lesson: chasing daily compounding is marketing, not math. The real levers remain rate and time.