Is APY the same as interest at a bank?

The number is calculated similarly. The guarantee behind it is entirely different.

A bank rate is a promise from a supervised institution, usually with deposit protection behind it up to a limit. A crypto APY is a projection of what an activity is currently producing, with no promise and no protection.

Three questions turn the figure into information. What is paid in? Eight per cent paid in a platform's own token is not eight per cent if the token halves. How long does it last? Incentive rates are advertised at their opening level and fall as more people join, by design. What did you give up? A locked position is not comparable to one you can leave at any moment.

APY also assumes automatic compounding, which in practice often needs a manual transaction that costs a fee — sometimes more than the compounding gains on a small position.

Reading APY and APR does the maths, and lending, and how it fails covers what happened to the platforms that offered the highest ones.

Last checked 19 Oct 2026.