What is APY when looking into opening a Savings Account?
The APY is the annual percentage yield. That means if you put $1,000 in today, you will get that percentage if you leave the $1,000 plus any interest earned in the account for an entire year. In other words, the APY includes the effect of compounding the interest. Compounding means that interest earned earns interest on itself. In your scenario, you have an APY of .30% (point three percent). This is not the same as 30% (without the decimal point). An APY of 30% would give you $300 total interest at the end of the year. An APY of .30% would give you $3 at the end of a year. A good APY now is 4.5% or so, which would give you $45 in interest on your $1,000 at the end of a year.
