Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What is % APY?

April 26, 2017APY

0

Posted

What is % APY?

1 Answer

0

Posted

APY means Annual Percentage Yield. What it represents is the effective compounded interest rate. For example, if you were to put just one dollar into an online savings account for one year, the APY is the percentage increase that your dollar will gain. So if APY is 5%, you will have $1.05 after one year. The actual interest rate will be less than 5%, but compounded either daily or monthly – depending on the bank – your effective annual yield is 5%.