What Is the Annual Percentage Yield (APY)?

What Is the Annual Percentage Yield (APY)?

The annual percentage yield (APY) is the rate of return on your saving account taking into account both the interest rate and the effect of compounding (i.e. earning interest on interest). Your savings account earns interest each day on your average daily balance, which is then credited to your account at the end of the month. The next month, you earn interest on both your original balance and the interest payment deposited to your account.