Differences between Bypass and Decoupling capacitors
Bypass and decoupling capacitors are terms often used in electronic circuits. These capacitors are used extensively in most electronic circuits. Sometimes there is a confusion about the two as regards their functions and construction of these capacitors.
Decoupling Capacitors
Decoupling capacitor serves a function opposite to that of coupling capacitor. It isolates AC component and passes on DC to another circuit. Decoupling capacitors are used to isolate and decouple two circuits, or a local circuit from an external circuit. They decouple AC signal from DC and vice versa.
A decoupling capacitor often acts as local energy reservoir. It opposes sudden change in voltage, absorbs spikes and dips in voltages, and provide stability to supply. This is vital necessity for most IC circuits. Coupling capacitor is usually located very near to IC to filter out all ripples and disturbances to provide almost steady unvarying DC signal. In digital circuits, majority of capacitors are decoupling capacitors.

The circuit above is a simplified one, used for isolation of spikes and high frequency interference from source. These capacitors protect power supply from electrical noise generated by the circuits, as also protect the circuit from effect of noise on power supply from other circuits in the vicinity. They provide low impedance path for high frequency ripples, and capacitor of sufficiently high value is important.
In transistor circuits, with the best of connections between Vcc and ground, line inductances cannot be eliminated completely, and some inductance is always present. Track distances introduce their own impedances that create transients or switching noise. Decoupling becomes therefore necessary. Since even the lead impedances become significant, these capacitors have to be as close to the circuit as practical.

Circuits like microcontrollers or microprocessors, as also digital circuits need strictly regulated power supply. It is general practice to use a 100 nF ceramic capacitor with each logic IC, as also an electrolytic capacitor per layer of PCB or circuit segment. Ceramic capacitors have excellent high frequency characteristics. Digital circuits operate very fast, and power supply to and individual IC may be contaminated by the outputs of other ICs. Decoupling capacitors help remove all such disturbances. The capacitor has to be located very close to the device or IC. Many times, it is necessary to isolate high frequency interferences from ICs more efficiently. The 10μF capacitor in above circuit may even be an electrolytic capacitor, while 0.1μF may a ceramic capacitor. Sometimes even a third capacitor of still lower value is needed closest to the IC, in addition to the two above.
Bypass Capacitors
A bypass capacitor is one which short-circuits (bypasses) AC signal from one stage to ground to a great extent, and provides practically pure DC signal to load. It is placed across a component, or group of components, to bypass AC signal from AC/DC combination and allow DC to flow through the component.
It can be placed between input signal and ground, to remove any AC signal by providing low impedance path to ground. If connected to rectified AC signal, it bypasses ripples by providing short-circuit path, and allows pure DC voltage to go through. Bypass capacitor has two main functions, viz., to short AC signal to ground, and work as energy reservoir.
It bypasses most of the noise present in DC signal, and provides practically pure DC signal without ripples. In most cases, the capacitor shorts the AC signal to ground. In the absence of bypass capacitor, an amplifier output will have extremely high noise level / disturbance. When ac capacitor is large enough, it provides short-circuit to audio frequencies and eliminates negative feedback.
Emitter Bypass capacitor
In a transistor circuit, the bypass capacitor usually connected either on emitter side in parallel with a resistor. When on emitter side, its impedance has to be lower than resistance value in parallel. It can be similarly used in triode or vacuum tube circuits. It is used in amplifier circuit to provide alternative low impedance path to AC signal and bypass the emitter resistor.

Bypass capacitors find use in several applications, and some representative ones are as follows:
- Power conditioning
- DC / DC converters
- Amplifiers
- Clock calendars
- Signal coupling / decoupling
- High- and low-pass filters
Many times, inductance of bypass capacitor poses problems, and has to be considered, as it could lead to resonance. Bypass capacitor values usually range between 0.1 μF to 1 μF, while 0.1 μF is generally preferred, though a discretion is often needed for practical circuits.
Differences between coupling capacitor and bypass capacitor
Decoupling capacitor stores energy, absorbs excess energy spikes, and return the energy back to power line to maintain smooth flow of current. Bypass capacitor provides AC signal return path between power line to ground. Considering the function and purpose, both bypass and coupling capacitors can often be used interchangeably.
- Bypass capacitor is used to bypass high frequency noise signals to ground by providing low impedance return path, and protect the circuit from them. A decoupling capacitor is used to stabilize the DC signal or power supply.
- A single electrolytic capacitor serves well for low impedance shunting, but two different types of capacitors may be needed for stabilize the voltage to the level necessary.