APY vs. interest rate: What’s the difference for your savings?
Summary
The article explores the critical distinction between Annual Percentage Yield (APY) and the basic interest rate, shedding light on their impact on savings and investments. APY accounts for compound interest, making it a more accurate indicator of the actual return on savings accounts or investments. It emphasizes that consumers should prioritize APY when choosing financial products, as it can significantly affect long-term gains. The piece also advises on how to calculate APY, considering compounding frequency. By understanding this financial nuance, individuals can make informed decisions, potentially boosting their earnings and achieving better financial outcomes. Don't underestimate the power of APY!
SF Gate
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