What does AER mean on a current account?

watch_laterUpdated 22 days ago

AER stands for Annual Equivalent Rate. It's a standardised measure that makes it straightforward to compare rates across different accounts, regardless of how often interest is actually paid – monthly, quarterly or annually. 

It shows the interest you'd earn over a full year, assuming interest is compounded annually, and it accounts for the effect of interest building on itself over the year.

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