What AER means
AER is the number that lets you compare savings accounts on a like-for-like basis.
What it shows
The Annual Equivalent Rate shows what you'd earn over a year if interest were paid and compounded, standardising accounts that pay monthly, annually or on maturity.
Why it matters
Because AER accounts for compounding, comparing AERs is fairer than comparing raw interest rates — always compare the AER.
Common questions
- Is AER the same as the interest rate?
- Not exactly — AER folds in the effect of compounding, so it can differ slightly from the headline gross rate.
- Does AER include bonuses?
- Introductory bonus rates are usually included in the AER for the first year; check whether the rate drops afterwards.
Information only, not financial advice.