Rate Board

APR/APY Definitions

APR: The term annual percentage rate (APR), also called nominal APR, and the term effective APR describes the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc. It is a finance charge expressed as an annual rate.

Link: http://en.wikipedia.org/wiki/Annual_percentage_rate


APY: Annual percentage yield (APY) (also called Effective Annual Rate (EAR) in finance) is a normalized representation of an interest rate, based on a compounding period of one year. APY figures allow for a reasonable, single-point comparison of different offerings with varying compounding schedules. However, it does not account for the possibility of account fees affecting the net gain. APY generally refers to the rate paid to a depositor by a financial institution, while the analogous annual percentage rate (APR) refers to the rate paid to a financial institution by a borrower.

Link: http://en.wikipedia.org/wiki/Annual_percentage_yield