| | A | Annual Equivalent Rate - AER |
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| What does AER mean?
AER stands for Annual Equivalent Rate and means the customer rate of interest what he would get if it's calculated annually, instead of a monthly basis. This rate is recalculated each time when an interest payment has been made. AER also expresses how well an investment is doing. This is only a national rate and it's an assumption on what the customer gain might be.
For example if you are receiving interest each quarter of a year, or on a monthly basis then this amount is added to your initial deposit resulting your next interest payment. And on occasions if your getting interest in each quarter year, this sum might be higher then the quoted gross rate because of the total interest earned in the rest of the interests during the year. The gross AER stands for the interest earned before paying the taxes. Net AER means the sum which remains after paying out the 20% tax. In conclusion AER helps you compare what kind of amount of money a specific investment might bring you. | | | | |
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