Annual Percentage Yield (APY)
Annual rate of return factoring in compounding over the year.
Detailed Description
Annual Percentage Yield (APY)
What does APY stand for?
APY stands for Annual Percentage Yield.
How is APY different from the nominal interest rate?
APY includes the effects of compounding, while the nominal interest rate does not.
What factors can influence APY?
Factors include the nominal interest rate, compounding frequency, deposit amount, and account type.
Is APY relevant for loans and credit products?
APY is less commonly referenced for loans but can be relevant for certain financial products linked to savings.
What regulatory requirements exist for disclosing APY?
Financial institutions must disclose APY for savings accounts under regulations like the Truth in Savings Act.