APY
Annual percentage yield: the yearly return on savings, stated so that compounding is already included.
APY is the number to compare savings accounts with, because two accounts quoting the same rate can pay different amounts if they compound differently.
APY is what you get; APR is what you owe.
Often confused with
- APR
- APY measures what savings earn and includes compounding; APR measures what borrowing costs.
Taught in
See also
3.1.A.3 · 3.1.C.3