What is APY?
The Annual Percentage Yield (APY) is a financial tool used to ascertain how much a deposit earns you. An APY is a standardized way of comparing investments. As a consumer, you want your money to be working at its best for you, and this mean putting it where it will receive the best APY. The APY is the yield your deposit will earn over the term of a year. It refers to your income earned, and one of the most important aspects of choosing a bank in which to deposit your earnings is to make sure it has a high APY. The APY is unique because it takes compounding into account. Compounding is the process of receiving earnings on your earnings. The quoted APY tells you how much you are actually making on your money, while some other ways of quoting a rate do not necessarily take this into account. The APY is generally higher for accounts with more frequent compounding periods. You should ask your financial company how often they compound. If your money is compounded daily instead of monthly or
APY (Annual Percentage Yield) refers to the annual rate of interest received by the social investor taking into account the effect of compounding. For example if a social investor has made an investment of Rs. 1000, they will get an interest of Rs. 20 after their repayments. However after each payment they will get the divided interest on Rs. 1000 loan and not the remaining loan amount. Hence the flat rate is recalculated to give an APY. Rang De gives its social investor an APY of 3.5% (2% flat).
