Glossary · UK
What is AER?
Annual Equivalent Rate — standard way to compare savings account interest.
Full Definition
AER (Annual Equivalent Rate) is the rate of interest paid on a UK savings account if interest were compounded annually. Required disclosure makes it easy to compare accounts regardless of how interest is paid (monthly, quarterly, on maturity). For example, a 5.00% account paying monthly has the same AER as a 5.116% account paying annually. Always compare AER, not headline rates.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.