A measure of the real annual cost or return of a product: it includes the interest rate, how often interest is paid and, for loans, mandatory fees and costs. It is used to compare offers. In Spain it is called TAE.
An example
A deposit paying 3% nominal with monthly interest has an annual equivalent yield of about 3.04%, because each month's interest also earns a return.
Other calculators
Learn more
- What does a mortgage ten years longer cost?
- Extra payments: lower the payment or shorten the term?
- How much does an origination fee add to a loan?