What is the difference between the Annual Percentage Yield (APY) and the Bond Yield (BEY) for a CD?
Annual Percentage Yield is a very simple measure of the average interest rate earned on a CD during its term. Although APY has some shortcomings as a measure of value (which are described below), its disclosure is required under The Federal Reserve’s Regulation DD (Truth in Savings Act) for all primary market (new issue) CDs. In fact, APY is the only yield measure that may be disclosed to the individual investor.
