AER

Annual Equivalent Rate

AER is the standardized annual interest rate that shows what a return or cost would be over one full year, including the effect of compounding.

AER is commonly used in the UK to compare savings accounts. It takes into account how often interest is paid (monthly, quarterly, annually) and shows what you'd earn if you left money in the account for a full year with compound interest.

Related Terms

APR

Annual Percentage Rate

APR is the annual rate charged for borrowing or earned through investment, expressed as a percentage...

APY

Annual Percentage Yield

APY is the effective annual rate of return taking into account the effect of compounding interest. I...

Interest

Interest is the cost of borrowing money or the return earned on deposited funds, typically expressed...

Compound Interest

Compound interest is interest calculated on both the initial principal and the accumulated interest ...

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