FAQ/Knowledge Base

The APR or annual percentage rate is the basic interest rate on an interest-bearing account. The APR does not take into account the compounding of interest within that year. Alternatively, the APY or annual percentage yield does take into account the effects of intra-year compounding.

Typically interest on interest-bearing accounts compounds monthly, weekly or daily. The APY or annual percentage yield takes into account how often interest is applied to the principal balance. Thus the APY is known as the "effective annual return" and is slightly higher than the APR.