Interest rate and annual percentage yield difference
Interest rate and annual percentage yield (APY) are two different things, though they are related terms. When you open a savings account, you’ll often be given both numbers, usually expressed in percentages. The bank will typically emphasize the APY over the interest rate. Annual percentage rate, or APR, is an expression that tells you the true cost of borrowing money. In addition to the interest you pay your lender, APR also takes certain other costs into An interest rate is the percentage of your deposit that banks pay you in order to hold your money with them. APY is an acronym that stands for for annual percentage yield. It refers to the total amount of interest you earn on your savings over a year, and it factors in compounding interest.