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What is the Annual Percentage Yield (APY)?

April 26, 2017annual APY PERCENTAGE yield

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What is the Annual Percentage Yield (APY)?

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Annual percentage yield (APY) is the yield you earn on a deposit over the course of a year; it is a standardized way of comparing investments. The APY is important because it takes into account the assumed compounding of your interest. Compounding is simply a method of making earnings on your earnings. The APY shows you how much youre actually earning on your money. Other ways of quoting a rate dont necessarily show you the full picture. On RateService, we use the standard Effective Annual Rate calculation for calculating the APY .